Stamp Duty Tax Refund Guide

A stamp duty refund is a government repayment paid to individuals who have paid too much stamp duty land tax.

Stamp duty is a government tax levied on the sale of some properties and land. How much stamp duty is payable is subject to the type of property purchased, its value and the buyers status.

In some circumstances you can overpay SDLT which can be recovered in the form of a stamp duty refund from HMRC. An overpayment is not automatically repaid by HMRC and requires a claims process to be followed.

There are numerous reasons why an individual might overpay their stamp duty but regardless of the cause the result is the same: you’re entitled to a refund.

SDLT is a complex area of the UK tax system which can quickly become confusing. You need to fully understand which parts apply to your circumstances to make sure you don’t miss out on a refund of stamp duty or make a claim for a refund in error.

Making a successful and legitimate stamp duty tax rebate claim requires a thorough understanding of the process, eligibility criteria and potential pitfalls.

Why could I be due a Stamp Duty Rebate?

Stamp duty overpayments can occur for several reasons a simple miscalculation being one of them.

Stamp duty rates can be complex with varying rates depending on the type and value of the property. A basic mistake in these calculations can lead to a significant overpayment.

The government allows a number of stamp duty exemptions and reliefs which are available in a variety of situations.

Some of most common types of stamp duty reliefs and refund reasons include:

• First time buyers relief.
• Shared ownership relief for first time buyers.
• Additional property relief if you sell your previous main residence within three years.
• Multiple dwellings relief for houses with an annexe.
• Stamp duty refund on uninhabitable buildings.
• Mixed use relief for example a building with both a commercial and residential part.
• Group relief.
• SDLT refund on miscalculated properties: Whether from an estate agent, a solicitor or a well meaning friend incorrect information can result in higher than necessary stamp duty payments.
• Probate relief if you have inherited a property.

This list is not exhaustive with reliefs and exemptions being buried in the stamp duty land tax rules and regulations which stretch to nearly two hundred sections with literally hundreds of subsections.

Eligibility criteria for a Stamp Duty Refund

The eligibility criteria for an SDLT rebate or relief covers a broad range of individuals including first time buyers, buy to let landlords, investors through to limited companies.

Considering the existence of approximately 50 distinct exemptions and reliefs you firstly need to find the right exemption or relief and then apply it correctly to your property purchase.

The second criterion is the time limit which is given as 12 months from the SDLT return filing date.

Finally you must have all necessary documentation to prove your claim. This includes the original legal documents, proof of payment and any other relevant paperwork.

There’s always the risk of rejection. If your claim is not accurately prepared or if you lack the necessary documentation your claim may be rejected by HMRC.

This is why it’s so crucial to understand the process and prepare thoroughly before you submit your claim.

How long do I have to claim a Stamp Duty Rebate?

When it comes to selling your old primary residence within three years of acquiring your new primary residence you have a 12 month window from the date of sale to claim a stamp duty refund of the 3% surcharge.

If you miss the deadline a claim for a stamp duty refund may still be accepted with HMRC stating “If it’s more than a year since the filing date, as long as you’re not excluded from claiming relief, you can apply for Overpayment Relief.”

For UK non residents it’s necessary to submit a claim for a refund within two years from the date of your property purchase.

How long does it take to get a Stamp Duty Rebate paid?

Assuming that you’ve filled all the details that HMRC requires you can expect to receive a response within a span of about 4 to 8 weeks, notifying you about the status of your rebate  (whether it’s been approved or not).

However this process may extend if additional information is needed for your claim. If your stamp duty rebate application is approved you should receive your refund shortly after the decision is made.

How do I submit a Stamp Duty Refund claim?

You can submit your stamp duty refund claim online with HMRC by using your government gateway account.

Our government gateway guide gives you more information on what it is and how to register if you need to.

There is a postal option which needs you to fill in an on screen form which can then be printed off and posted to HMRC.

Before you start to complete the form make sure your internet browser is current. It’s not possible to save a form that’s only partially filled out so to avoid repetition try and gather all necessary information before you begin.

It’s crucial to ensure that all information provided is accurate and complete as any discrepancies can lead to HMRC delays or rejections so double check everything before making your submission.

SDLT tax refund claim form checklist:

• Your personal information.
• The property purchase date.
• The primary purchaser’s information if it differs from yours information about the property that incurred higher SDLT rates.
• Unique SDLT transaction reference number.
• Previously owned main residence address and sale date.
• Previously owned main residence buyer’s name the sum of tax paid on the property that incurred higher SDLT rates.
• The sum of tax you’re seeking to be reimbursed.
• the bank account and sort code details of the individual receiving the payment.

For stamp duty claims amending your original SDLT return:

• SDLT return UTR Number.
• Copy of the original SDLT return.
• Reason why you think you’ve overpaid stamp duty tax.
• The parts of the SDLT return which are wrong.
• Revised figures.
• The amount of stamp due refund due.
• contract for the land transaction (if appropriate).
• the instrument (if any) by which the transaction was effected – this is generally the relevant transfer document, the lease or similar document.
• Recipients bank account name, account number and sort code.

The UK government in May 2022 alerted new property owners about unscrupulous tax repayment representatives who are attempting to convince them to file uncertain stamp duty reimbursement claims through cold calls.

Such claims might result in substantial tax liabilities for homeowners in the future.

If you’ve been contacted regarding a stamp duty refund and you’re uncertain about your eligibility the government recommends going back to your initial conveyancer and there’s a government support line at your service for guidance (0300 2003 510).

What are the Stamp Duty Rates?

Stamp Duty rates vary and are determined by the value of the property. If the buying price falls below the minimum limit no stamp duty is charged.

It’s crucial to understand that the stamp duty land tax (SDLT) is calculated based on the property’s price, not the mortgage amount you secure and it has no impact on the council tax you are required to pay either.

For residential properties the current rates for stamp duty are:

Property Buying Price Limit:                  

Below £250,000: 0%

£250,001-£925,000: 5%

£925,001 to £1.5 million: 10%

Exceeding £1.5 million: 12%

Stamp Duty Refund support

HMRC provides support and guidance via their SDLT helpline on 0300 200 3510 or +44 1726 209 042 from outside the UK.

Call centre opening times are Monday to Friday: 8:30am to 5pm.

You can also write to HMRC at:

BT – Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD
United Kingdom

Professional Stamp Duty advice

If you would prefer to pay for independent advice you can ask a professional who can guide you through the process, ensuring that you have all the necessary documentation and that your claim is accurately prepared.

A professional stamp duty advisor can help you avoid miscalculations, misinformation, or misunderstanding of the rules which can lead to incorrect payments being issued by HMRC.

Stamp duty refunds can be checked by HMRC after being repaid and if they are deemed incorrect the refund will be recovered after their compliance checks are complete.