Higher Rate Refunds of Stamp Duty Land Tax (SDLT) – Extension of time

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About Claire

By Claire Fountain

When someone purchases a property as a new main residence but does not sell their existing main residence, the surcharged rate of duty has to be paid on the purchase price.

There is a claw back rule. You can apply for a refund of the supplemental amount paid for the higher rate of SDLT for additional properties if you sell what was previously your main home. The proviso is that you must sell your previous main residence within three years of buying the new property to qualify for the refund.

Under existing rules, HMRC must have your request within 12 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence, whichever is later.

The Impact of COVID-19

On 3 June 2020, the Government announced a limited extension of the three-year window in which to claim this refund. Updates to HMRC's guidance will indicate the exceptional circumstances in which sales outside the three-year window will trigger a refund.

This three-year window extension claim must be based on the restrictions placed on the housing market during the COVID-19 pandemic. The Government has recognised that some people have been unable to sell a previous main residence to qualify for the refund.

Exceptional circumstances

You may still be able to apply for a refund, if you purchased your new home on or after 1 January 2017 and were unable to sell your previous home within 3 years. To be able to get the refund, the delay in selling must be because of reasons outside of your control. These may be, but are not limited to:

  • the impact of coronavirus (COVID-19) preventing the sale

  • an action taken by a public authority preventing the sale

Once the reason has ended, you must sell the previous home to be able to apply for the refund. You can then write to HMRC and include:

  • an explanation on why you were unable to sell your previous main home within 3 years

  • other required information as the HMRC may direct.

You should send the information to:

BT - Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD

It remains that in most cases, the existing three-year window should be sufficient and any HMRC decision to extend the deadline will be made on a case by case basis. HMRC will monitor the applications as a protection against fraud and abuse.

For further information, please contact a member of our Residential Property team.

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