When the chancellor of the exchequer announced in his 2015 Autumn Statement that Stamp Duty Land Tax for “additional homes” i.e. second home or buy-to-let purchases would attract a 3% surcharge on the normal rates, he also made provisions to assist those who may have had to purchase a second home, with the intention of selling the original one later. For instance, somebody who has relocated for work and subsequently then sold their initial home.
The Government will allow up to three years for the sale of the existing property, which should allow for any delays or problems with a transaction. SDLT being charged initially at the higher rate for the new property, a stamp duty refund then can claimed when the old home is sold.
If somebody already owns more than one property, and they sell their main residence, they won’t have to pay the 3% SDLT surcharge if they buy a new main residence within three years.
Claiming your SDLT refund
Having completed the sale of the original property it is possible to claim a refund of the higher rate of SDLT charged on the new property. It must be claimed via HMRC by completing the form “Apply for a repayment of the higher rates for additional properties”. This must be claimed within three months of completion of the sale of the main residence and only if the sale is completed within 3 years of the completion of the additional property. Transactions completed outside of this time frame will not be able to claim a refund.
Definition of “main residence”
Many factors will determine whether HMRC considers your home to be your main residence and they may ask for evidence of the following:
Other information may be used or taken into consideration, such as correspondence addresses given to third parties (utility suppliers, mortgage lenders, banks etc).
If you would like further advice, please feel free to contact us.