The ins and outs of stamp duty rebate: What you need to know

Stamp Duty - What you need to know

When buying or transferring a property in the UK, a tax known as stamp duty is imposed on the transaction. However, sometimes individuals may overpay stamp duty due to mistakes in calculation, eligible exemptions, or other reasons. In such cases, the overpaid amount can be claimed back through the process of stamp duty rebate.

The process of claiming a stamp duty rebate can seem daunting, but with the right information, it can be a relatively straightforward process. The first step in claiming a stamp duty rebate is to gather all of the necessary information and documents. This will include the original stamp duty land tax return, proof of payment of the stamp duty, and any other relevant documents that support your claim.

Paid a surcharge of 3% on Stamp Duty?

One of the most common reasons for overpaying stamp duty is purchasing a second home. When buying a second home, an additional 3% in stamp duty is required to be paid on top of the revised rates for each band. However, if you sell your main residence within three years of completing a new home, you may be eligible for a refund of this 3% surcharge. This is because once your first property has been sold, your second property becomes your main place of residence, and the stamp tax paid as such will be considered as overpay, and thus valid for a refund.

Another common reason for overpaying stamp duty is when you are a first-time home buyer, you can claim relief if you are buying a residential property for the first time. However, this relief does not apply if the purchase price is more than £500,000.

When a local authority makes a compulsory purchase of a property from the owner in order to sell to a third party for development, stamp duty may be valid for refund. For example, the local authority can get a relief from stamp duty when it buys a necessary property.

Property developers subject to planning obligations, such as schools can claim relief from stamp duty on the first purchase of the property from the original owner before transferring the finished building to the local authority. Charities can get relief from stamp duty when they buy properties for charitable purposes.

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Non-UK Crown Employees can claim relief from the usual 2% surcharge on top of the stamp duty rates for crown employees who are non-UK residents but have bought a residential property in England or Northern Ireland. This relief also applies to their spouse or civil partner. Get in touch with Stamp Duty Rebates today and one of our experts will guide you through the assessment and calculate any refund due.