Almost everyone who buys land or property in the UK has to pay Stamp Duty Land Tax (SDLT) on their purchase.
SDLT is a tax imposed by the government on land and property purchases over a certain threshold. It’s payable to HMRC, and most homebuyers will leave the SDLT calculation up to their solicitors who are handing their home purchase.
It’s fair to say that we assume our SDLT calculation is correct when we pay it to HMRC, and in any case, it’s very unlikely HMRC will contact you if you pay too much.
The facts, however, are that thousands of homebuyers find out that they’re eligible for a refund on the amount of Stamp Duty they paid on a home purchase within the last 12 months, or further back.
There are a number of reasons for overpaying. It’s not as simple as your solicitor making an error, there are a number of changes in the law and special exemptions that you may not know you’re eligible for.
If that isn’t enough to convince you to check if you’re due a refund, in 2017-18, more than £105 million was refunded by the government.
The average refund amount was £27,205, and most homebuyers were not aware they had overpaid until they started double-checking what they paid.
How do you know if you’re eligible for a SDLT refund?
The only way you can be 100% sure if you’re due an SDLT refund is to work with an experienced tax advisor specialising in SDLT.
You can check yourself or with the help of your solicitor if you wish to as the HMRC does have a stamp duty refund calculator. But their stamp duty calculator is only intended to be used as a guide and is not always 100% accurate.
There is a long list of possible exemptions that can apply depending on your individual circumstances, and this is where so many homeowners run into problems and end up paying too much.
Stamp Duty has also been subject to more changes than any other comparable tax. This makes it hard for solicitors to keep up to date as SDLT isn’t an area of tax most solicitors specialise in.
It’s for these reasons why it’s advisable that you always work with a specialised tax accountant when checking your eligibility for stamp duty refunds.
Most stamp duty refunds must be claimed within 12 months after the date of filing your original SDLT return. However, if you bought a property within the last 3 years, there is a chance you can still claim a refund.
For something as important as a refund and with the average amount being refunded so high, it’s always worth working with an experienced SDLT professional to be 100% sure if you’re due a refund or not.
How to claim an SDLT refund
Stamp duty refunds need to be filed directly with HMRC. There is an online form you can fill out and it will take you through all the steps you need to follow.
Filling out your return is something you can do without the help of a tax advisor. As long as you have the correct figures from your tax advisor, you are able to fill out the form and submit your claim.
There is no set timeline for HMRC getting back to you and letting you know if your claim has been successful. Generally speaking, however, you should have the money in your account within six weeks if successful.