Claim back stamp duty? How to get a stamp duty refund

25/09/2018

Need help reclaiming stamp duty?

Our solicitors can help you reclaim overpaid stamp duty. Our fees are competitive and the process quick. Click to get a quote or call us today on 0333 344 3234 (local call charges apply). We can help with:
  • reclaiming second home stamp duty following the sale of your main residence; and
  • first time buyer relief on shared ownership purchases up to £500,000 (following the 29th October 2018 budget)

UPDATE Oct 2018 - Chancellor Philip Hammond has retrospectively granted first time buyer relief on stamp duty for first time buyers of shared ownership properties worth up to £500,000.

This refund applies to all first time buyers of shared ownership properties who qualify and who completed their purchases on or after 22 November 2017.

Please contact us either by form (see above) or by phone (0333 344 3234 - local call charges apply) and let our experienced conveyancing solicitors help you claim your first time buyer shared ownership stamp duty refund.

The second home additional stamp duty came into force on the 1st April 2016 which means individuals and companies may need to pay a higher rate of Stamp Duty Land Tax (SDLT) if they buy an additional residential property for more than £40,000. This is the general principle, however you can read more about if this affects you on the HMRC website here - Stamp Duty Land Tax: buying an additional residential property.

There are many reasons why you may buy a second property that doesn't replace your main residence such as:

  • You lose your buyer - if you lose your buyer and don't want to lose your purchase, you may be forced to buy your new main residence without actually selling your old main residence. Read more about managing your chain here.
  • Delay in matrimonial sale - if you are going through a divorce you may have to purchase a new main residence before your previous property is sold.
  • Spouse's property took longer to sell - similar to the point above, however there may be a time where you choose to buy now and then sell your previous main residence in the future.

HMRC allows for you to claim back the second home stamp duty when you sell you previous main residence and we set out below the process on how to do this.

Want to calculate how much refund HMRC owe you?

Our calculator is fully updated to include first time buyer relief and second home rates.



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This article examines:



Fixed Fee, No Sale No Fee with a 5 out of 5 rating

 
    1

    How to claim back stamp duty on your second home

You are able to apply to HMRC for a refund of the additional rate of stamp duty if you sell your previous main residence within 3 years of your paying the higher rate of Stamp Duty.

There are two ways to claim your refund from HM Revenue and Customs:

  • use the HMRC online form - click here to complete; or
  • complete an online form, print if off and the send in the post to HM Revenue and Customs, BT - Stamp Duty Land Tax, BX9 1HD

Make sure you provide all your details to HMRC including the property address where you paid the additional stamp duty, property address for the previous main residence you have just sold, the stamp duty paid (get this from your SDLT return on your purchase) and the amount of higher rate stamp duty you are claiming back.

 

    2

    How do you calculate what the higher rate is?

You can use our online stamp duty calculator to help you calculate what the higher rate of stamp duty is. The current higher rate is 3% of the purchase price (as long as the purchase price is over £40,000).

Here is an example of a stamp duty refund

Jane and Michael are married and are in the process of selling their main residence and buying their new main residence. Jane and Michael lose their buyer but continue to purchase their new main residence for £600,000.

Based on the stamp duty rates on completion (23rd February 2018) they pay stamp duty land tax of £38,000 (based on £20,000 of normal stamp duty land tax and £18,000 of higher rate stamp duty - 3% of £600,000 is £18,000).

Jane and Michael sell their previous main residence 4 months later and then apply to HMRC for a stamp duty refund for £18,000.



    3

    How long does it take HMRC to refund the stamp duty?

15 working days is the normal time however this can take longer if you do not provide all the information the HMRC require. If it does take longer than 15 working days you won't be paid any compensation for the delay however you can request to get paid the interest on the refund and this is added onto it automatically when it is repaid.

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