Higher SDLT and buying before selling

Bea787

Hi, wondering if you can help me be clear on this - if you buy a house before having sold yours but yours is on the market to sell, and you move into the house as your main residence and it will be your only property when your own sells - do you have to pay the higher SDLT? If  so, I understand that you can claim that back if you sell within 3 years but is that a guaranteed and straightforward thing with a quick refund? I have been told that some folk have experience of not actually being charged the higher rate if they are on the market and clearly looking to sell and am interested to know if that is widespread or rare. It seems like a waste of hmrc resources dealing with refunds when a sale is likely pretty imminently, not that efficiency or cost effectiveness is ever their top concern in my experience! Thanks in advance.

GDB2222

I am surprised You have heard that other people have not paid the 3% . As far as I know there’s no concession. 

Slithery

These 'some folk' you have heard of are committing tax fraud.

If you purchase your new main residence before the previous one has sold then you are liable for the additional SDLT, it's an easy process to then claim this back if you are so entitled.

davidmcn

Bea787 said:

Hi, wondering if you can help me be clear on this - if you buy a house before having sold yours but yours is on the market to sell, and you move into the house as your main residence and it will be your only property when your own sells - do you have to pay the higher SDLT?

Yes

If so, I understand that you can claim that back if you sell within 3 years but is that a guaranteed and straightforward thing with a quick refund?

It's guaranteed and straightforward, anecdotally it's not processed as quickly as people might like.

I have been told that some folk have experience of not actually being charged the higher rate if they are on the market and clearly looking to sell and am interested to know if that is widespread or rare.

You don't "get charged", it's self-assessment. If they're not paying the higher rate then they're committing tax evasion.

It seems like a waste of hmrc resources dealing with refunds when a sale is likely pretty imminently

Not sure how you expect HMRC to assess whether or not a sale is "likely pretty imminently". Yes there's some admin involved in refunds, but HMRC aren't daft and realise they'd lose even more if they trusted people not to "forget" to pay the higher rate if they haven't disposed of the first property after 3 years. Plus of course doing it this way means they get the money upfront rather than having to wait.