What is SDLT?

When purchasing any property in the UK costing over £250,000 you must pay a tax known as Stamp Duty Land Tax. Stamp Duty is paid to HMRC at varying rates depending on the price of the property that you are purchasing. However, there are some exemptions, for example, if you are a first-time buyer and you meet the criteria you do not have to pay the tax. There are also different boundaries for different house prices. A house in the £250,000 bracket is subject to SDLT at 0%.

Since the 23rd of September 2022, the then chancellor made multiple SDLT changes, such as an increase to the nil rate band, from £125,000 to £250,000. Changes to the first-time buyers clause, from £300,000 to £425,000, and additionally an increase in the max a person can purchase a house and claim the first-time buyers benefit from £500,000 to £625,000.

How to avoid paying stamp duty on a house purchase

The only way to completely avoid paying SDLT is to either buy a property that is under £250,000 or qualify for the first-time buyer’s relief. 

Houses that don’t meet the £250,000 threshold aren’t subject to stamp duty. Searching for a property with a price lower than this value will mean that you will not have to pay SDLT. 

View all SDLT exemptions here. 

As of November 2017, first-time buyers are exempt from paying SDLT. A first-time buyer by definition is someone buying a property for the first time, they may not have previously lived in or owned their own house.

 If you fall into this category you will be exempt from paying stamp duty. The threshold at which you will start paying the tax is set at £425,000 for first-time buyers.

Could you have overpaid stamp duty?

The rules around stamp duty tax have changed massively in the last few years. Overpaid stamp duty land tax is common for several reasons, in 2016 there were changes to the tax that many people may not know, as well as further changes made to SDLT in September of 2022, check our SDLT changes explained page for more information.

View the criteria on our SDLT refund page and get in touch to claim your refund if you believe you may be eligible.

Multiple Dwellings

Reclaiming SDLT

There are many cases in which you may be entitled to reclaim stamp duty, and it is important to know the stamp duty reclaim rules. From uninhabitable properties to miscalculated charges, here you may find you are eligible to reclaim SDLT yourself.

In terms of the stamp duty reclaim rules for uninhabitable residences, the Housing Act of 1967 stated that in order to be deemed a habitable property there are certain features a property must have in order to qualify, such as a working hygiene space, bathroom and working toilet and a space where an individual can cook for themselves.

In rare cases, you may have accidentally overpaid the amount of stamp duty you were supposed to pay, this will most likely be down to a calculator error, usually online stamp duty calculators are designed to offer guidance, but in some cases these calculations were taken as final, resulting in many people complaining that they had overpaid.

This resulted in many cases of SDLT refunds.

Stamp Duty Land Tax Relief

SDLT relief is essentially any program or incentive that reduces the amount of tax payable by an individual or business entity. As well as the first-time buyer’s scheme, there are others such as SDLT multiple dwellings relief.

Stamp Duty Refund Steps

Gathering documentation and evidence will be a vital first part of the refund process, as the more certifiable documentation you can collect, the higher your chances of succeeding in the stamp duty refund process.

Our tax specialists here at Capex will provide you with forms to fill out yourself, covering aspects such as the original transaction and the reason for the refund request.

When it comes to submitting the claim, this can be done through multiple avenues, such as submitting online or submitting by mail. Processing can take time, your trusted tax authority will take time to review and evaluate your request, so patience is key.

If by any means your refund request is denied, an explanation will follow as to why, however, you can appeal by following our appealing steps.

How to avoid paying stamp duty on a second home

When you purchase more than one dwelling where a transaction or a number of linked transactions include freehold or leasehold interests in more than one dwelling, you can claim Multiple Dwellings Relief. Another example of a tax relief scheme is the SDLT relief for charities. If land or property is purchased for the use of charitable purposes. The HMRC will monitor the usage of the property and can withdraw the tax relief if the property stops being used as a charity or for charitable purposes within three years of purchase. View our page outlining all tax relief schemes available and find out if you are eligible. Claiming tax exemptions can be a long and time-consuming process. Due to various policy changes and constant rule amendments, it is highly recommended that you seek professional assistance.

What Happens If You Don’t Pay Stamp Duty Land Tax?

Every time you miss a stamp duty land tax deadline, it will add up each deadline, if you fail to submit a return within twelve months then you will be charged with a tax-based penalty, which could then potentially see you paying double the original amount you were supposed to pay.

Contact us today and begin your SDLT exemption claim.