Claim Back Stamp Duty: How to Get a Stamp Duty Refund
(Last Updated: 17/06/2024)
15/02/2023
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6 min read
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.
Additionally:
Hammond extended the claim time limit for properties sold on or after the budget date (29th October 2018).
- Properties sold on or before 28 October 2018
If you sold your previous main residence on 28 October 2018 or earlier, HMRC must have your request within 3 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence, whichever is later.
- Properties sold on or after 29 October 2018
If you sold your previous main residence on 29 October 2018 or later, HMRC must have your request within 12 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence, whichever is later.
This article examines:
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Can you claim back stamp duty?
HMRC gives you the option of claiming back stamp duty on second home when you sell you previous main residence and we set out below the process on how to do this. Please note that you have a maximum of 3 months or 12 months only (see above, depending on when you sold your property), once your house is sold, to apply to HMRC to reclaim your overpaid stamp duty.
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. We discuss how to manage your chain in further detail here - How does a property chain work?
- 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.
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How do I claim back stamp duty UK?
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.
How long to reclaim second home stamp duty?
Please note that you have a maximum of 3 months or 12 months only, once your house is sold, to apply to HMRC to reclaim your overpaid stamp duty. We can help handle this process for you.
Make sure you provide all your details, 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.
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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).
Our calculator is fully updated to include first time buyer relief and second home rates.
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 (February 2023) they pay stamp duty land tax of £35,500 (based on £17,500 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.
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Can I pay my stamp duty in instalments?
Your solicitor is required to hold the stamp duty funds in their account before completion when purchasing a property or within 14 days if you are transferring equity. However, it is advisable to speak to HMRC to confirm if you can pay your stamp duty in instalments.
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How long does it take for HMRC to refund stamp duty?
15 working days is the normal timeframe, 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.
Need help reclaiming stamp duty?
Our solicitors can help you reclaim overpaid stamp duty. Our fees are competitive and the process is quick. You can fill in the form below or call us today on 0333 344 3234 (local call charges apply).
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Written by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Reviewed by:
Caragh Bailey
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
