Stamp Duty (SDLT) Refund

Could you be eligible?

Eligibility for a Stamp Duty refund principally applies to the following:

• Uninhabitable properties
• Multiple properties
• Replacement of only, or main, residence
• Non-UK Resident First-Time Buyers

Therefore, if you currently fall into any of the categories, or will potentially fall into one, or are simply interested in the mechanics of a reclaim, please read on…

What is Stamp Duty?

In the words of HMRC:

"You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.

The tax is different if the property or land is in:

• Scotland - pay Land and Buildings Transaction Tax
• Wales - pay Land Transaction Tax if the sale was completed on or after 1 April 2018

You pay the tax when you:

• buy a freehold property
• buy a new or existing leasehold
• buy a property through a shared ownership scheme
• are transferred land or property in exchange for payment, for example you take on a mortgage or buy a share in a house"

Interestingly, although now described as a ’tax’, when introduced in 1694 it was a fixed fee levied to cover the cost of the physical stamping of all ‘official’ documents, including land and property related.  Then, in the 19th Century, the levy was changed to reflect the value of the transaction involved with the documentation and has, essentially, remained the same, albeit a further evolution was the introduction of the ’ Stamp Duty Land Tax’ (SLDT), specific to land and property.  In 2015 the SLDT was replaced in Scotland with ‘Land and Buildings Transaction Tax’ (LBTT) and, in 2018, it was replaced in Wales with ‘Land Transaction Tax’ (LTT). 

Claiming A Refund

Assuming you fall into eligibility criteria, there is a 12 month limit on the claim from the original SLDT filing date.  It may be possible to extend this in some circumstances, however, for the purposes of a straightforward claim, it is always best to adhere to the base deadlines.  You will need the original paperwork concerning the transaction and then it is advisable to contact an expert, such as Taxeezy, to assist you in promoting the claim.  Claims can be made online, or via post.

The Principal Bases of Claim

Uninhabitable Property

If the property has initially been deemed as ‘uninhabitable' and the full residential rate of SLDT has been paid it might be possible to obtain a refund on the basis that the non-residential rate should have been paid.  The non-residential rate is considerably lower than the residential rate.

Multiple Dwellings Relief (MDR)

It is important to note that MDR has now been discontinued, however still applicable when contracts were exchanged on or before 6th March 2024 and contracts completed before 1st June 2024. 

In its simplest form, the relief concerns where a single transaction relates to the purchase of two or more dwellings and the overall purchase price is split into lower values, per dwelling, potentially cancelling any higher rate of SLDT already paid on the gross transaction and claiming a refund.

Second Home Replacement of Only, or Main, Residence

If you have been subject to a 3% surcharge for acquiring a second property and then decide to dispose of the original (main) residence within 3 years of acquisition you may be able to reclaim the surcharge.  There is also a 'special case’ potential claim if you were unable to sell your original home within 3 years due to the impact of Covid or due to the action of a Local Authority.

Non-UK Resident First-Time Buyers

Non-UK Residents are subject to an effective 2% surcharge when purchasing their first UK property by virtue of not being able to benefit from the zero rate starting threshold.  However, if they have been present in the UK for 183 days within a 365 day period prior to, or following, the transaction, they may be eligible for being taxed on the same basis as a UK resident, accordingly claiming a refund.

Other Bases of Claim

The other bases of claim include:

• Properties with Annexe (‘Granny Annexe’, etc.)
• Mixed Use Properties (residential and commercial in the same building)
• Transfer of property within a Group of Companies

The Solution

Clearly, being that the bases and circumstances are so widespread, this article can only summarise the possibilities and you will, almost certainly, need to take expert advice if you feel that you may be eligible.   Such advice is readily available from Taxeezy, either within the process of undertaking one of our many services, such as Tax Returns (UK Resident and Non-Resident), CGT Reports and NRL registrations, or stand-alone using our comprehensive ’Taxeezy Doctor’ service, which provides up to one hour of one-to-one advice within a very reasonable fee of £99.00.

’Signing Up’ to Taxeezy is completely free and without obligation and there are no fee surprises, as can often be encountered in the tax industry.  We guarantee that you will know exactly where you stand and how much it will cost you before you engage any of our services.  Indeed all of our fees are detailed on the outside of the website.