Higher rate

If you own one or more residential properties in England and buy another, you must pay a higher stamp duty land tax (SDLT) charge. This is equal to 3% of the purchase price on top of the normal SDLT charge. It applies even if your ownership of more than one residential property is temporary, e.g. where you’re unable to sell your old home before buying a new one. The good news is that where conditions are met the additional SDLT charge can be reclaimed.

Refund conditions

You’re entitled to a refund if the property on which the higher rate SDLT was paid is your new home (main residence) and you sell your previous main residence within three years of buying the new one. Full details of the conditions for a refund are included in HMRC’s guidance.

New guidance and online service

HMRC has published new guidance with the intention of making reclaiming the higher rate SDLT easier. The guidance includes a link to a new online service for submitting your claim, although you can still opt to complete and submit a paper claim form if you prefer.

Note. While there are similar charges and rules for refunds for properties located in Scotland and Wales, they are managed by the tax authorities in those countries and HMRC’s refund service can’t be used for these. It’s vital that your claim for a refund reaches HMRC by the later of:

• twelve months after the date of sale; and
• twelve months after the due date of the SDLT return form for your new main home, which is usually 14 days after completion.

To use the online form, you need a Government Gateway user ID and password. If you don’t have an ID, you can create one when you use the service. It’s fairly straightforward, just follow the on-screen instructions.