Have you overpaid on your stamp duty?
Stamp duty (SDLT) is a tax people pay when buying land or property in the UK above a certain value. Stamp Duty rates in the UK have been subject to numerous changes over the years meaning people don’t always know where they stand or what they owe, meaning many people are eligible to reclaim overpaid stamp duty. Legislation contains numerous exemptions, reliefs and qualifying criteria and little guidance is provided for specific cases meaning a lot of the info available is generic at best, even on the government website.
Many people do not know where to go to reclaim overpaid stamp duty or where to find the best and most accurate SDLT reclaim service.
We have put together some information on how to find out whether you have overpaid and if so, how to claim it back.
The first step is to calculate how much stamp duty was owed with our online Stamp Duty calculator.
Before the SDLT holiday, normal stamp duty rates in the UK rates are applied, properties and land in England and Northern Ireland would have a threshold of £125,000 for residential properties and £150,000 for non-residential above which Stamp Duty will be charged. There are different rates of stamp duty and what you pay depends on the property price and the band that each portion falls within.
So if you bought a house for £400,000 house in England as your main (and only) home and you were not a first-time buyer, the stamp would be calculated like this:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £150,000 = £7,500
Total stamp duty land tax (SDLT) = £10,000
However, in April 2016, rates were increased for second homes and buy-to-let properties. This means an extra 3% surcharge is payable on top of the existing SDLT rates.
If the above example was a second home the following calculation would apply:
- 3% on the first £125,000 = £3,750
- 5% on the next £125,000 = £6,250
- 8% on the final £150,000 = £12,000
Total SDLT = £22,000.
Learn more about Stamp Duty Rates in the UK
However, peoples circumstances are not always straightforward; Buyers can claim a stamp duty refund if they sell their main residence within three years of completion on a new home.
REMEMBER: The original three-year rule has been extended due to coronavirus, for anyone who purchased a new main residence on or after January 1, 2017. These people may be eligible to apply for a refund if they were unable to sell their previous main residence before the expiry of the three-year time limit owing to exceptional circumstances beyond their control. These exceptional circumstances include being prevented from selling the property owing to government guidance during the Covid-19 pandemic.
In the above case the buyer would be refunded the 3% surcharge; the amount above what would have been charged had the property not been a main residence. In this case, the refund is £12,000. There is no getting around having to pay the extra in the first place, but it’s a comfort to think you may get it back.
It’s not just people with second homes who are eligible to reclaim overpaid stamp duty. Some transactions which have potential for incorrect calculations are those for:
- Land over half a hectare (1.24 acres) and/or agricultural land with paddocks, stables etc.
- Commercial or non-residential buildings on the land.
- Offices bought using ‘permitted developments rights’.
- Land with planning permission for residential development and construction.
- Annexes, flats, cottages, granny flats in the grounds
How do I claim Back Stamp Duty?
It is not necessary to use a solicitor or accountant when claiming back stamp duty. First, check our Online stamp duty calculator to find out how much stamp duty should have been paid.
You can apply using this online form.
The information it would be useful to have to hand is:
- Your name and address
- Details of the property that attracted the higher rates of SDLT, including the date of purchase and the SDLT unique transaction reference number
- Details of the home you’ve sold, including the date of sale, the address of the property and the name of the buyer
- The amount of tax paid on the property that attracted the higher rates of SDLT
- The amount of tax you’re asking for a repayment of
It’s always best to begin your claim sooner rather than later as there are deadlines to think about. It is important that the claim deadlines are not missed. Under normal circumstances (when coronavirus extensions do not apply), Stamp Duty claims can only be submitted within four years of the property purchase.
Reclaim Overpaid Stamp Duty: Checklist
- Get together all relevant information
- Check that you qualify for a rebate
- Use an SDLT Calculator to work out the stamp duty you should have paid
- Let us do the rest.
Claiming back stamp duty can be fairly straightforward with this SDLT Reclaim Service, simply use our SDLT Calculator and fill in some brief details of the property you have bought, the purchase price and the amount of SDLT you paid and go from there.