Stamp duty refund

Kym122

I’m hoping someone will be able to help advise on a stamp duty query that I have!

I own House A which was my main residence up until May 2024 when I purchased House B which I moved into as my main residence. I paid the higher rate of stamp duty as it was a second home, but I had always intended on selling House A to get a partial stamp duty refund on House B.

My circumstances have wildly changed since purchasing House B and I now am looking to purchase House C. I am hoping to do this without needing to sell House B as I don’t want to lose House C. I will sell House B in the near future as I need the funds from it for renovations on House C.

My basic understanding is that I would need to sell House A before buying House C to get the stamp duty refund on House B. And once I have done that I can sell House B to get a stamp duty refund on House C.

Basically, I don’t want to lose out on the partial stamp duty of House B as it’s about £12k. Do I need to do it in the order stated above, or could I purchase house C first, but still be able to get a refund on both houses stamp duty if I sold in the correct order (I.e sell House A first then House B?) I hope this makes sense and I’m hoping someone can advise!

laboy

Step 1: Sell House A within three years of buying House B.

Step 2: Claim your £12k refund from HMRC for the surcharge paid on House B. 

Step 3: Purchase House C, paying only the standard SDLT rates. 

Step 4:  Sell House B and claim a refund of any surcharge paid on House C - within three years if buying House C.

I believe the three year periods to sell each property as above applies. I believe the process needs to be followed is as above, ie in sequential steps. 

Good luck! Let the forum know how you decide to proceed.

Keep_pedalling

laboy said:

Step 1: Sell House A within three years of buying House B.

Step 2: Claim your £12k refund from HMRC for the surcharge paid on House B. 

Step 3: Purchase House C, paying only the standard SDLT rates. 

Step 4:  Sell House B and claim a refund of any surcharge paid on House C - within three years if buying House C.

I believe the three year periods to sell each property as above applies. I believe the process needs to be followed is as above, ie in sequential steps. 

Good luck! Let the forum know how you decide to proceed.

Step 3 will require the additional SDLT to be paid, as the OP would be going from one house to two.

Kym122

Thanks for coming back to me, I appreciate that. I understand that there is a 3 year period to sell in order to claim back the surplus stamp duty. Does this mean I couldn’t purchase House C before selling House A if I wanted to get the refund on House B? Thanks!

laboy

Yes that’s my understanding

Kym122

Thank you!

caprikid1

Step 3: Purchase House C, paying only the standard SDLT rates. 

Step 4:  Sell House B and claim a refund of any surcharge paid on House C - within three years if buying House C

You contradict yourself ? 

They have to pay a surcharge on C no question.

SDLT_Geek

Kym122 said:

I’m hoping someone will be able to help advise on a stamp duty query that I have!

I own House A which was my main residence up until May 2024 when I purchased House B which I moved into as my main residence. I paid the higher rate of stamp duty as it was a second home, but I had always intended on selling House A to get a partial stamp duty refund on House B.

My circumstances have wildly changed since purchasing House B and I now am looking to purchase House C. I am hoping to do this without needing to sell House B as I don’t want to lose House C. I will sell House B in the near future as I need the funds from it for renovations on House C.

My basic understanding is that I would need to sell House A before buying House C to get the stamp duty refund on House B. And once I have done that I can sell House B to get a stamp duty refund on House C.

Basically, I don’t want to lose out on the partial stamp duty of House B as it’s about £12k. Do I need to do it in the order stated above, or could I purchase house C first, but still be able to get a refund on both houses stamp duty if I sold in the correct order (I.e sell House A first then House B?) I hope this makes sense and I’m hoping someone can advise!

This might well be worth taking specialist advice on, as the rules here are more flexible than you suggest.  I am assuming you will be within the three year time limits.

Yes, your order of events works:

(a)  Sell House A, so becoming entitled to a refund of the extra 5% on House B.
(b)  Buy House C, paying the extra 5%,.
(c)  Sell House B, entitling you to a refund of the extra 5% on House C.

The other order of events you mention also works well:
(a) Buy House C, paying the extra 5%.
(b)  Sell House A, entitling you to a refund of the extra 5% on House B and House C.
(c)  Sell House B later.

Another order of events would be:
(a)  Buy House C, paying the extra 5%.
(b)  Sell House B, entitling you to a refund of the extra 5% on House C.
(c)  Sell House A, entitling you to a refund of the extra 5% on House B.

This is complicated stuff, but you should be able to follow it through from a close reading of the guidance here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800