SDLT Refunds

A quick guide to stamp duty refunds

As the UK’s leading property tax experts, we’re the best people to help you claim your stamp duty refunds. As you’ll see below, stamp duty is an evolving and complex process, where mistakes are often made – which is why expertise is essential.

What is stamp duty and how does it work?

Stamp Duty Land Tax (SDLT) – usually referred to as stamp duty – is a tax imposed by the government on the purchase of land and properties. Different rates of tax are applied depending on the type of property and the purchase price of the property.

Simple? You’d think so, but the HMRC’s Stamp Duty Land Tax Manual has almost 200 sections, and 100s of subsections, highlighting the real complexity of this form of taxation.

Visit our stamp duty calculator for more information on the history of stamp duty, current rates and who has to pay.

Types of stamp duty

Stamp duty is categorised into 3 main types…

  1. Stamp duty on residential properties – this concept will be familiar to most people when purchasing a house. Tax rates start at 0% and rise on a sliding scale up to 12%. Lower rates apply to first time buyers.
  2. Stamp duty on buy-to-let and other types of additional properties – when you purchase an additional residential property which is not your main dwelling, a surcharge of 3% is applied, meaning that the rates are higher, starting at 3% and rising to 15%. This is often known as the buy-to-let stamp duty surcharge but would equally apply to the purchase of a holiday home.
  3. Stamp duty on commercial properties – different rates apply to the purchase of commercial properties. The scale is simpler, with just 3 different rates between 0% and 5%.

Contact us to see if you are eligible for a Stamp Duty Refund from HMRC

A brief look at multiple dwellings relief

Multiple Dwellings Relief (MDR) applies when two or more dwellings are purchased as part of a single transaction. In this case, stamp duty is based on the average price of the properties, not the total price or the price of each individual property. This can potentially offer a significant discount on the total amount if it was applied to each property individually and it’s important that this is calculated accurately. MDR can also sometimes apply to properties with additional facilities such as an independent annexe – and stamp duty refunds where this relief was not initially applied can be significant.https://www.youtube.com/watch?v=5-IpfxjedYU

Read: A guide to Stamp Duty Land Tax for Landlords

Who might be eligible for a stamp duty refund?

With around 50 types of exemptions and reliefs, it wouldn’t be unfair to say that your conveyancing solicitor will almost certainly not be an expert in calculating stamp duty. Stamp duty is a self-assessed tax, so it’s up to you and the professionals who represent you to calculate the correct amount to pay. It’s also your right to request a stamp duty refund for any overpayments you’ve made.

Stamp duty refunds can be due in situations such as:

  • Multiple dwelling relief not claimed where a self-contained annexe is part of the purchase.
  • Reclaiming the stamp duty surcharge for additional properties if you sell your original residence and make the surcharged property your main home within three years of purchase.
  • Incorrect calculation of stamp duty for mixed residential and commercial properties, where the incorrect ratio of residential to commercial property values has been applied.
  • Not claiming first time buyers’ relief
Applying for stamp duty refunds

If HMRC have contacted you or you think you’re one of the hundreds of homebuyers who have overpaid stamp duty, it can pay to have professional and experienced tax advisors on your side. To access personalised advice about stamp duty refunds, please call us on 01858 894349 or contact our stamp duty experts via email.