Can You Reclaim Stamp Duty?
If you have purchased a property recently, there’s a possibility you might have been wrongly charged a higher rate of Stamp Duty (SDLT). If you think you have been overcharged, you may be entitled to a stamp duty refund and are eligible to make a claim from HMRC. I am experienced in helping clients through the SDLT repayment process.
Have you overpaid your Stamp Duty?
First-time buyers, people who have bought a second property, those who’ve bought a property with an annexe and someone who has bought a property with mixed residential and non-residential use could be eligible for rebates on their Stamp Duty tax.
Stamp Duty land tax (SDLT) needs to be factored in during conveyancing – and it can feel like a slap in the face on top of all the other hidden costs in your property purchase.
Any residential property worth over £125,000 (or £40,000 for second homes) attracts a Stamp Duty charge that you have to pay to HMRC. Stamp Duty is calculated as a percentage of the price of the property, and the percentage goes up according to the price band.
Stamp Duty is higher for second homes, and lower for first-time buyers and those who buy a mixed-use property. There are some circumstances where you might have been wrongly charged a higher rate of Stamp Duty. If you think you have been overcharged, you can make a claim from HMRC.
Do First-Time Buyers Get Stamp Duty Relief?
Since 22 November 2017, Parliament has provided Stamp Duty relief to first-time buyers of wholly-owned and shared ownership properties worth no more than £500,000.
What a lot of first-time buyers don’t realise is that they can retrospectively claim Stamp Duty tax relief, if they bought their shared property on or after 22 November 2017.
Can I Claim Back Stamp Duty on my Second Home?
It’s not unusual for people to be stung by a higher Stamp Duty when they are buying a new home. If you haven’t sold your previous main residence beforehand, the new property is classed as a second home, which carries a higher rate of SDLT.
This can happen for various reasons: often if there is a delay due to a buyer pulling out or difficulty in selling a matrimonial home in the right time frame.
But there’s good news: if you sell your previous main residence within 3 years of paying the higher rate of Stamp Duty, you can claim money back from the HMRC.
Stamp Duty Refunds: SDLT on Annexes
You may have been charged extra Stamp Duty on a property containing an annexe or granny flat when you bought your property. Many buyers are not aware that the rate of Stamp Duty for these multi-dwelling properties is reduced, thanks to an allowance called Multiple Dwellings Relief, and end up being overcharged.
Stamp Duty Refunds: SDLT for Mixed-Use
If the residential property you bought has an element of commercial or non-residential use then you pay much lower rates of Stamp Duty. If you have overpaid Stamp Duty you can amend your SDLT return and make a claim to the lower rates of SDLT.
Can You Appeal Stamp Duty Land Tax?
If you think you might have been overcharged Stamp Duty, or that you could be entitled to a retrospective Stamp Duty relief, you can appeal to HMRC and make a claim for a rebate.
You may choose to make the appeal or claim yourself – by using HMRC’s calculator to work out the rates of Stamp Duty, and then writing to HMRC to claim for the amount you think you have overpaid.
How Long Do You Have to Claim Stamp Duty Back?
There is a time limit on when you can make a claim, though. Depending on the nature of your claim, you may have to make the claim within 12 months and 14 days of the purchase of your property or in some cases 4 years.
The refund rules are complicated but if you miss the deadline for making a claim you may still be able to claim against your conveyance. You can read more about the stamp duty refund claim process here
Getting Help Reclaiming Stamp Duty Land Tax
In my experience, many people find the process of claiming back their Stamp Duty complex and time-consuming, especially after the inevitable stress of house-buying.
I can help with assessing your eligibility for a stamp duty refund. I can also take over the whole business of reclaiming Stamp Duty for you– from calculating how much you are owed, collating all the necessary information, filing your claim and corresponding with HMRC and arranging the Stamp Duty refund payment. In some circumstances, it may be necessary for me to pursue a conveyancing adviser for negligence, if they failed in their duty to advise you of the potential SDLT savings at the time of your purchase. A word of caution: think long and hard before using a no-win/no-fee claims company or claims farmer, you can read my article on this topic here
Patrick Cannon, Tax Barrister
I have been advising on SDLT and Stamp Duty for over 35 years, first as a solicitor and latterly as a barrister. This experience has given me expertise in helping people reclaim overpaid Stamp Duty tax and representing them in cases of negligence.
For tax advice and representation in a Stamp Duty Land Tax case with one of the UK’s leading specialist SDLT tax advisers, please contact Patrick Cannon here.