Stamp duty -

ken_london

Hi everyone,

I was wondering if you could help us with a few questions about the stamp duty refund for main residences in England.

I bought a small one-bedroom flat, but due to the extortionate service charges, I ended up renting it out for a few years and staying at my relative’s place to cover the costs. About a year ago, I moved back into the flat and have been living there since. I’ve now found another property and made an offer on it.

Here are my questions:

If the sale goes through and I move into the new property, can I still claim the stamp duty refund even though I’ve only been living in my current flat for a year?

I know I need to sell the old property within three years of purchasing the new one, but in the meantime, can I rent it out if I can’t sell it straight away.

Also, I’ve heard that HMRC sometimes refuses stamp duty refunds, even when the situation seems pretty straightforward. Have you heard of this happening?

I’d really appreciate any advice or insights you can share.

Cheers,

Ken

SDLT_Geek

ken_london said:

Hi everyone,

I was wondering if you could help us with a few questions about the stamp duty refund for main residences in England.

I bought a small one-bedroom flat, but due to the extortionate service charges, I ended up renting it out for a few years and staying at my relative’s place to cover the costs. About a year ago, I moved back into the flat and have been living there since. I’ve now found another property and made an offer on it.

Here are my questions:

If the sale goes through and I move into the new property, can I still claim the stamp duty refund even though I’ve only been living in my current flat for a year?

I know I need to sell the old property within three years of purchasing the new one, but in the meantime, can I rent it out if I can’t sell it straight away.

Also, I’ve heard that HMRC sometimes refuses stamp duty refunds, even when the situation seems pretty straightforward. Have you heard of this happening?

I’d really appreciate any advice or insights you can share.

Cheers,

Ken

The four conditions to meet to qualify for a refund of the extra 5% SDLT are set out in the guidance here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

The condition which might just be a problem for you, is that you have lived in the flat as your only or main residence at some point in the three years leading up to the upcoming purchase. There is some guidance about this test here. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812. Much will depend on the circumstances in which you moved into the flat and whether at that time it was seen as your long-term home, or just a temporary fix until you bought something else.

SDLT_Geek

There is nothing in the rules for a refund which would stop you renting the flat out again, but the danger is that doing so could make it difficult to sell the flat within the three year time scale, given potential difficulties in obtaining vacant possession (if you wanted to sell the flat vacant).

bobster2

ken_london said:

If the sale goes through and I move into the new property, can I still claim the stamp duty refund even though I’ve only been living in my current flat for a year?

If you've sold the flat and bought a new property to live in at the same time - why would you be expecting any sort of refund? You wouldn't have paid the higher SDLT - just the standard SDLT which is not refundable.

ken_london said:

I know I need to sell the old property within three years of purchasing the new one, but in the meantime, can I rent it out if I can’t sell it straight away.

In theory - but as a previous poster has suggested - this could make it hard to sell within 3 years. What if a tenant doesn't want to leave?