Stamp duty – property purchasers face wait for refunds

Homebuyers who have been caught out by the second home Stamp Duty Land Tax (SDLT) surcharge when purchasing a new permanent residence before they have managed to sell their previous one are allegedly facing significant delays in receiving SDLT refunds.

Last year, former Chancellor George Osborne introduced the three per cent SDLT surcharge in a bid to clamp down on buy-to-let investment and to free up more homes for first-time buyers.

However, many home-movers who experience delays selling their old home before moving into a new one have also been caught out by the extra charge.

HM Revenue & Customs (HMRC) have been issuing SDLT refunds to homeowners who have been unfairly penalised but concerns have been raised that there are significant delays in repaying the money to those affected.

According to a report in The Telegraph, many home-movers have been forced to wait several months for their SDLT refunds to be processed.

This is despite the fact that HMRC’s own guidance suggests that refunds will be paid within 15 working days or less – assuming they manage to sell their former home within three years of purchasing their new one.

The newspaper cites the case of Ms Glenna Thorpe from Sheffield, who purchased a new home in January 2017.

Ms Thorpe had to pay an additional £10,000 in SDLT, as she had failed to sell her previous home before purchasing her new one.

She applied to HMRC for an SDLT refund in August – and is reportedly still waiting to receive the money she is owed.

HMRC has reportedly been unable to track her case or inform her of when she might receive her refund.

Despite this, HMRC’s latest data suggests that in most cases, refunds have been regular and successful.

According to official figures, 15,000 homebuyers caught in situations such as Ms Thorpe’s have received SDLT refunds since the surcharge was first introduced, totalling some £185 million.

The UK has some of the highest property taxes in the Western world. Figures show that property taxes – such as Stamp Duty and Capital Gains Tax (CGT) – account for well over 12 per cent of the total UK tax burden.

At Moore Thompson, our property tax experts are able to guide your clients and advise them on property tax issues to avoid any unnecessary surprises. To find out more about our services, including help and advice on SDLT, please contact us.