Stamp Duty Tax Refund Paid to HMRC on Purchase of Land

Stamp Duty Tax Refund is money we pay to HMRC when we buy land or property in the UK. Second homes usually come with an additional rate stamp duty to pay. Even if you sell your first property shortly after buying your next, then you may be able to claim a reimbursement for that tax you paid. This tax is due to be paid on property which is procured at more than £125000.  Historically it was introduced in 1964 to raise funds for war. More than the years, the tax has changed in volume.

How Stamp Duty Tax Refund Works?

It is necessary for the government the procure land and properties. Dissimilar rates of tax are applied depending on the nature of the property and the purchase price of the property. It has almost 200 sections and 100 subsections, highlighting the real complexity of this form of taxation.

Duty Rates:

0% up to £125,000

2% up to £150,000 to £250,000

5% up to £250,000 to £950,000

10% up to £950,000 to £1500,000

12% over £1500,000

Duty Types:

It is categorised into 3 main types

Residential properties:

This will be familiar to most people when purchasing a house. The tax rates start from 0% to rise to 12%. Low rates apply to first-time buyers.

Purchase to-let and other types of Other properties:

When you purchase additional residential property which is not your main dwelling, a surcharge of 3% is applied, starting at 3% and raising to 15%. This is often known as buy-to-let duty but would equally apply to the purchase of holiday homes.

Commercial properties:

Different rates apply to the purchase of commercial properties. This scale is simpler, with 3 different rates between 0% and 5%.

SDLT tax refund:

You can apply for repayment of higher rates of SDLT for additional properties if you have sold what was previously your main home or if you are the main buyer of the property which was charged at a higher rate.

An agent acting for them. You must have sold your earlier main residence within 3 years of buying the latest property to be eligible for a refund unless special conditions apply.

Properties sold on or before 28 October 2018:

If you have sold your previous main residence before 28 October 2018 or earlier, HMRC must have your request within 3 months of that previous main residence, or within 12 months of the case date of the return relating to the new house, whichever is later.

Properties sold on or before 29 October 2018:

If you have sold your previous main residence before 28 October 2018 or later, HMRC must have your request within 12 months of that previous main residence, or within the 12 months of the filing date of the return relating to the new residence, whichever is later.

Exceptional Circumstances:

You may still be able to apply for a refund, if you purchased your new home on or after 1 January 2017 and were unable to sell your previous home within 3 years. To be able to get a refund, the delay in selling must be because of reasons outside of your control. These can be, but are not inadequate to:

•         The impact of the coronavirus (COVID-19) preventing the sale.
•         An act taken by a public power foils the sale.

Once the reason has ended, you must sell the previous home to be able to apply for a refund. You can then write to HMRC and include:

an explanation on why you were unable to sell your previous main home within 3 years.

You should send the information to:

BT Stamp Duty Tax Refund

HMRC Revenue and Customs

BX9 1HD

Apply for repayment:

To apply for repayment you can:

•         Use an online form.
•         Fill in the form on-screen, print it off and post it to HMRC

Stamp Duty Land Tax Refund No Win No Fees:

Following for the simple steps to get started:

Check Eligibility:

Verify if you qualify for a refund based on specific circumstances, such as the fact that the purchased dwelling does not constitute residential property. Consequently, the price should be taxed at the non-residential or mixed rates and not the residential “standard rate” or higher rates.

Gather Documentation:

Collect all relevant documentation related to your property transactions. This may include purchase contracts, proof of payment, and any additional supporting documents required by HM Revenue and Customs.

Submit Your Claim:

Submit your claim along with the necessary documentation. Your claim will be reviewed to ensure accuracy and completeness.

Maximising Your Refund:

Exploring all the available avenues to secure the highest possible refund for you.

Claim Resolution:

After the submission of the claim, HMRC ensures a smooth and efficient resolution to your claim.

Stamp Duty Tax Refund Thresholds:

SDLT threshold has been increased to £250,000 from £125,000 and will stay in place until March 2025, according to the Chancellor’s Autumn Statement. It is payable on residential properties purchased in England and Northern Ireland.

The following rates are applied:

SDLT property threshold property rates from 23rd September- March 2025.

Up to £250,000 0%

 £250,001 to £950,000 5%

£950,000 to £1.5 million 10%

£1.5 million 12%

This is not payable by first-time buyers purchasing up to £450,000, and they pay less for any property worth over £450,000 but less than £650,000. The standard rates apply if they are paying over £650,000.

Duty Tax Rates in Wales:

In Wales, Land Transaction Tax is payable as an alternative to Stamp Duty Tax Refund.

0% up to £225,000.

6% of the portion over £225,000 up to and including £400,000.

7.5% of the portion over £400,000 up to and including £750,000.

10% of the portion over £750,000 up to and including £1500,000.

12% of the portion over £1500,000.

FAQs:

Who pays the duty?

The SDLT system is currently self-assessment-based, which means it is your responsibility to submit correct returns and pay to HMRC on time.

Can I avoid paying stamp duty tax refund on my second home?

You cannot avoid duty without any exemptions; it can result in monetary penalties, so don’t recommend trying to skip out on paying duty.

How do you go about making a claim?

Strong evidence is needed to prove that the property is unfit to live in. This could be in the form of:

• Photographs
• Builder’s quotes
• Building Surveys
• Improvement notices

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