Natalie Clifford explains how to claim a refund on the higher rate of SDLT for additional properties.
The Government imposes a higher rate of Stamp Duty Land Tax (SDLT) on the purchase of a property if at the time of that purchase you already own one residential property.
The higher rate begins at 3%, and like the standard rate, increases in accordance with the property value.
In situations where you are purchasing a new home and selling your existing home, the timing of the two can have an impact on whether you are liable to pay the higher rate of SDLT. Ideally, the two transactions would run simultaneously, resulting in you only owning one property at one time. However, it is not always possible to time the transactions of your sale and purchase to coincide. If this is the case, you could end up purchasing your new home before the sale of your old property has completed. This would result in you owning two properties at the time of your purchase and therefore you would be liable to pay the higher rate of SDLT.
The Government recognises that the timing of a sale and purchase do not always run smoothly, and so allow you to apply for a refund on the higher rate of SDLT which you have paid whilst replacing your main residence. You must apply for a refund to HM Revenue and Customs within 3 months of the sale of your previous main residence or within 12 months of the filing date of the return relating to your purchase (whichever is latest).
The online form requests the following information:-
- The buyer’s name and contact details
- The seller’s name and contact details
- The property which you have purchased as your new main residence
- The property which you have sold as your previous main residence
- The effective date of purchase (this is also known as your completion date)
- The SDLT Unique Transaction Reference Number (this is obtained when filing your SDLT)
- The amount of tax which you paid when purchasing your new main residence
- The amount which you are requesting to be refunded to you
The refund which you are entitled to is calculated by taking the amount of SDLT which you have paid, minus the amount of SDLT which you should have paid.
The refund can be requested by yourself, or by an agent acting on your behalf. Burnetts regularly offer this service to clients by completing and sending the forms to HMRC before transferring the monies to the client once we have received them.
It may be helpful to note that you cannot save the online form and so you must have all of the information which you need ready and available before you begin.
If you have any questions on SDLT please contact Natalie Clifford on firstname.lastname@example.org.
About the author
Natalie is a Paralegal in the Residential Conveyancing team