If you have bought a property in the UK for over £250k in the last 12 months you may have paid too much stamp duty…
Thousands of people have overpaid Stamp Duty on purchases since changes in legislation in 2016. Millions of pounds in overpaid stamp duty has been refunded to thousands of homeowners. You may be owed money. Let us check and help you get the tax back
Did You Know?
HM Revenue & Customs (HMRC) has refunded £127m of stamp duty to second-homeowners since the surcharge was introduced: 6,800 additional property refunds totalling £80m were paid in 2016/17 with a further £47m repaid in Q2 2017. In total, HMRC had to give refunds on 10,700 transactions at an average cost of £11,869 each.
In one case handled by our team, a young woman buying a flat, named her father as a guarantor and borrower on the mortgage. She was incorrectly told that as her father already owned a separate property, he was liable for the 3% surcharge. This meant being incorrectly charged £14,000 for stamp duty, when the correct bill was £5,000, a £9,000 difference.
What is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax (SDLT) is a tax payable by property purchasers in England, Wales and Northern Ireland. Most people use a solicitor or legal conveyancer to act for them, but it’s the purchaser’s responsibility to pay any SDLT and many conveyancer simply do not give advice on Stamp Duty. In Scotland, it’s called the Land and Buildings Transaction Tax (LBTT).
Looking at the current stamp duty rates it seems fairly straightforward but a change that took effect in April 2016 where a 3% surcharge was applied to the purchase of second homes. Under the replacement main residence rule, people who buy a second property without selling the first must pay the higher stamp duty upfront. If they then sell their former home within three years, they are eligible for a refund.
The stamp duty rates are currently set at the following thresholds:
- £0 to £125,000 nil
- £125,001 and £250,000 2%,
- £250,001 and £925,000 5%,
- £925,001 and £1.5m 10%, and
- Over £1.5 Million 12%