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Second properties normally include an extra fee of stamp responsibility to pay. However, in the event you promote your first property shortly after shopping for your second, then you definately might be able to claim a refund on that tax you paid.
Stamp responsibility is the cash we pay to HMRC when when shopping for land or property within the UK above a sure worth. How a lot you pay is affected by the worth of your property and whether or not you’re a first time purchaser.
In this text we’ll clarify:
Related content material: How to keep away from stamp responsibility
Second house house owners that promote one among their properties may very well be in line for a stamp responsibility refund
Stamp responsibility surcharge
In April 2016 the charges of stamp responsibility had been elevated for second properties and buy-to-lets (excluding caravans, cellular properties or houseboats).
It meant patrons must pay a 3% surcharge on high of current SDLT charges.
So for instance, in the event you bought a house for £400,000, you’ll pay:
On the primary £125,000 = £3,750 (no stamp responsibility however 3% surcharge)
Between £125,000 to £250,000 = £6,250 (2% stamp responsibility and three% surcharge)
£250,000 to £400,000 = £12,000 (5% stamp responsibility and three% surcharge on the ultimate £150,000)
This means your whole stamp responsibility invoice = £22,000
What is the stamp responsibility refund?
Buyers are in a position to claim a stamp responsibility refund in the event that they promote their foremost residence inside three years of finishing on a brand new house.
If you purchased your new foremost residence on or after January 1, 2017, you could be eligible to use for a refund.
The refund is the three% surcharge – the quantity above what you’ll have been charged had the home not been an extra property.
In the case above, it quantities to £12,000.
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How to use for a refund
You don’t have to make use of a solicitor or accountant. You can apply utilizing an internet type or fill within the type on-screen, print it off and submit it to HMRC.
To apply on-line, you want a Government Gateway person ID and password, which you’ll create once you use the service.
HMRC will goal to course of the compensation inside 15 working days from the date it receives all the knowledge it wants, which incorporates:
Your title and handle
Details of the property that attracted the upper charges of SDLT, together with:
date of buy
SDLT distinctive transaction reference quantity
Details of the house you’ve offered, together with
date of sale
handle of the property
title of the client
Amount of tax paid on the property that attracted the upper charges of SDLT
How a lot tax you’re asking for a compensation of
Bank account and kind code particulars of the individual to obtain the cost
Find out extra: How to fill in a tax return
How lengthy do I must make a claim?
It is price making the claim sooner quite than later as there are deadlines to consider.
If you offered your property on or after October 29, 2018, you’ve got:
12 months of the filling from the date you offered your property to make your request to the taxman
Or inside a yr of the brand new residence’s stamp responsibility submitting date, whichever is later
If you offered earlier than that filling date, you’ll have wanted to:
Make the claim inside a yr of the stamp responsibility being filed on the acquisition
Or inside three months of finishing the sale of your first property, whichever is later
Miss these dates and your refund claim will likely be invalid.
Checklist
Check that you simply qualify for a rebate
Use a tax calculator to work out how a lot you’re owed
Get collectively the related info
Apply for a refund on-line at HMRC
Don’t neglect the deadlines
Find out extra: “How I bought my housebuilder to pay my stamp responsibility”
Got a query for our mentors? Drop us an e-mail to questions@timesmoneymentor.co.uk and we’ll get it answered.
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