Our subscriber paid extra stamp duty land tax (SDLT) when he bought his new home because he still owned his old one which he was doing up to get a better price. How long does he have to reclaim the extra SDLT?

Higher rate SDLT

The higher rate of stamp duty land tax (SDLT), which was introduced in April 2016, applies where you buy a residential home (a dwelling) and you already own one or more. This was bad news for buy-to-let investors who were the government’s intended target for the new tax. The trouble is that the extra SDLT (3%) catches innocent buyers who, for whatever reason, acquire a new home before selling their old one. There’s no escape from paying the extra tax but it can be reclaimed later, subject to conditions.

Trouble selling

One of our subscribers was desperate to move home but he couldn’t find a buyer. He eventually raised extra finance to buy his new home with a plan to make cosmetic changes to his old one so that it was more saleable. He paid the extra SDLT, a whopping £15,000, confident that he would be able to reclaim it when he sold his old home. Just over 15 months plus many hours of DIY later he sold his old home on 25 January 2019. Of course, he now wants to reclaim the extra SDLT.

A change of deadlines

In the original draft legislation the higher rate of SDLT could only be reclaimed if you sold your old home within 18 months of buying the new one. After pressure the government increased the time allowed to three years, but there’s another time limit to consider.

Trap. There are deadlines for making a claim. This was amended in the 2018 Budget meaning there are now different deadlines for reclaiming the extra SDLT charges depending on when the transaction (sale of your old home) takes place.

Sales on or before 28 October 2018. If you sold your previous main residence on 28 October 2018 or earlier, a refund must be claimed by the later of either:

  • three months of the sale of the previous main residence; and twelve months of the filing date of the SDLT return for your new home (usually 30 days from completion).
  • Sales on or after 29 October 2018. If you sold your previous home on 29 October 2018 or later, a refund must be claimed within twelve months of the later of either the:
  • sale of your old home; and
  • filing date of the SDLT return for the purchase of your new home.

The claim process

The good news is that our subscriber has plenty of time to make his claim (until 24 Jan 2020). Interestingly, our subscriber’s solicitor offered to make the claim for him when the sale of his old home was completed – for a fee of £300 (plus VAT), which we thought was steep for the work involved.

Tip. HMRC makes it easy to reclaim the extra SDLT (there are different procedures for Scotland and Wales). You have two options: a downloadable form or an online claim through your GOV.UK account. Neither should take more than ten minutes of your time.