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    • nkomp18
    • By nkomp18 10th Nov 18, 9:45 AM
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    nkomp18
    Stamp duty question
    • #1
    • 10th Nov 18, 9:45 AM
    Stamp duty question 10th Nov 18 at 9:45 AM
    I have a question in regards to the new stamp duty laws.

    In April 2016 the higher rate stamp duty was introduced. However, it was retrospective and was also being applied to properties bought prior to April 2016, I believe from end of November 2015 onwards.

    Now the new budget was introduced in 29 October 2018 and I noticed that it also retrospective from 22nd of November 2017 onwards.

    I exchanged on a property in August 2018, does that mean I can claim stamp duty back?
    Last edited by nkomp18; 10-11-2018 at 9:53 AM.
Page 1
    • p00hsticks
    • By p00hsticks 10th Nov 18, 10:31 AM
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    p00hsticks
    • #2
    • 10th Nov 18, 10:31 AM
    • #2
    • 10th Nov 18, 10:31 AM
    In April 2016 the higher rate stamp duty was introduced. However, it was retrospective and was also being applied to properties bought prior to April 2016, I believe from end of November 2015 onwards.
    Originally posted by nkomp18
    I'm assuming you're based in England or Wales.

    I'm pretty sure the 3% increase for second homes wasn't retrospective. It was announced in the November 2015 Autumn statement and took effect for properties completing on or after April 2016.

    Reductions in SDLT for first time buyers announced in the 2017 Autumn Statement took effect immediately (or actually at the start of that week).

    I'm not sure what 'new stamp duty laws' you are referring to - as far as I'm aware there weren't any changes to SDLT in the latest Autumn statement.

    It's normal for changes announced in the budget to take effect immediately, as the Finance act that provides the legislation to back it up, although completed several months later, traditionally passes though the house unopposed.
    Last edited by p00hsticks; 10-11-2018 at 10:46 AM.
    • davidmcn
    • By davidmcn 10th Nov 18, 10:49 AM
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    davidmcn
    • #3
    • 10th Nov 18, 10:49 AM
    • #3
    • 10th Nov 18, 10:49 AM
    I exchanged on a property in August 2018, does that mean I can claim stamp duty back?
    Originally posted by nkomp18
    If you've merely exchanged and not completed then you haven't paid any stamp duty - and you'll be entitled to pay at the rates which applied at the time you exchanged.

    I think you're confused about it being retrospective - as above, it's only retrospective in the sense that by the time the legislation has gone through Parliament, it is deemed to apply from the Budget day it was announced (subject to transitional arrangements for those already in a contract).
    • nkomp18
    • By nkomp18 10th Nov 18, 11:40 AM
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    nkomp18
    • #4
    • 10th Nov 18, 11:40 AM
    • #4
    • 10th Nov 18, 11:40 AM
    I exchanged in February 2016 and my lawyer said the new higher rate laws affect me because the April 2016 law was retrospective.

    I completed in August 2018 and paid Stamp duty on the 31st of August.

    The new reduced stamp duty law was announced in October 2018 but the government page says :

    The relief will apply retrospectively from 22 November 2017, meaning that a refund of tax will be payable for those who have paid SDLT after the 22 November 2017 in circumstances which now qualify for First Time Buyers’ Relief.

    So to me that sounds like I can claim all the stamp duty back. Right?
    • Tom99
    • By Tom99 10th Nov 18, 12:51 PM
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    Tom99
    • #5
    • 10th Nov 18, 12:51 PM
    • #5
    • 10th Nov 18, 12:51 PM
    I exchanged in February 2016 and my lawyer said the new higher rate laws affect me because the April 2016 law was retrospective.

    I completed in August 2018 and paid Stamp duty on the 31st of August.

    The new reduced stamp duty law was announced in October 2018 but the government page says :

    The relief will apply retrospectively from 22 November 2017, meaning that a refund of tax will be payable for those who have paid SDLT after the 22 November 2017 in circumstances which now qualify for First Time Buyers’ Relief.

    So to me that sounds like I can claim all the stamp duty back. Right?
    Originally posted by nkomp18

    The FTB relief backdated is if you were a FTB after 22 Nov 2017 but because you bought a shared ownership property and elected to pay stamp duty only on the share you were buying say 50%, rather than on the total market value, you were not allowed FTB relief.
    Now you can claim back that stamp duty.
    • p00hsticks
    • By p00hsticks 10th Nov 18, 12:52 PM
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    p00hsticks
    • #6
    • 10th Nov 18, 12:52 PM
    • #6
    • 10th Nov 18, 12:52 PM
    I exchanged in February 2016 and my lawyer said the new higher rate laws affect me because the April 2016 law was retrospective.

    I completed in August 2018 and paid Stamp duty on the 31st of August.

    The new reduced stamp duty law was announced in October 2018 but the government page says :

    The relief will apply retrospectively from 22 November 2017, meaning that a refund of tax will be payable for those who have paid SDLT after the 22 November 2017 in circumstances which now qualify for First Time Buyers’ Relief.

    So to me that sounds like I can claim all the stamp duty back. Right?
    Originally posted by nkomp18
    I think you (or I) are getting confused here.

    As per my previous post, the 'higher rate laws' introduced in the Autumn 2015 statement and legalised in April 2016 only applied to second homes / additional properties, and wasn't retrospective as (as far as I recall) it was based on completion dates, not exchange dates.

    If you are now saying you are eligible for first time buyer relief then these higher rates wouldn't have been applicable to you whenever you exchanged/completed.

    Was the property you bought the first and only property you own, what was it market value and how much stamp duty did you pay ?
    • nkomp18
    • By nkomp18 10th Nov 18, 1:37 PM
    • 170 Posts
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    nkomp18
    • #7
    • 10th Nov 18, 1:37 PM
    • #7
    • 10th Nov 18, 1:37 PM
    The higher rate laws back in April did affect me because at the time I owned a property and exchanged on a second one. It was because of the fact that the law was retrospective that I was forced to sell my other property, even though I exchanged 2 months before the law was introduced.

    By the time of completion I had already sold my other property and this was my only property in the UK and I paid 16k stamp duty in August, which from what I understand wouldn't apply today
    • Tom99
    • By Tom99 10th Nov 18, 1:44 PM
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    Tom99
    • #8
    • 10th Nov 18, 1:44 PM
    • #8
    • 10th Nov 18, 1:44 PM
    The higher rate laws back in April did affect me because at the time I owned a property and exchanged on a second one. It was because of the fact that the law was retrospective that I was forced to sell my other property, even though I exchanged 2 months before the law was introduced.

    By the time of completion I had already sold my other property and this was my only property in the UK and I paid 16k stamp duty in August, which from what I understand wouldn't apply today
    Originally posted by nkomp18

    How much did you pay for the property? Was it a shared ownership? If so what %age share did you buy?
    • sheramber
    • By sheramber 10th Nov 18, 2:34 PM
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    sheramber
    • #9
    • 10th Nov 18, 2:34 PM
    • #9
    • 10th Nov 18, 2:34 PM
    You owned house A which you sold before buying house B.
    from the link below you are not a first time buyer

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/751718/Stamp_Duty_Land_Tax_relief_for_first_time_buyers_-_guidance_note.pdf

    7
    Chapter
    3: Definition of a first time buyer
    In order to count as a first time buyer, a purchaser must not, either alone or with others,
    have previously acquired a major interest in a dwelling or an equivalent interest in land
    situated anywhere in the world.
    This includes previous acquisitions by inheritance or gift, or by a financial institution on
    behalf of a person under an alternative financescheme
    .
    Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was
    also a beneficiary of the trust.
    Relief is also not denied if the purchaser owns or
    has previously owned non-residential or mixed-use property, as long as that property did not include a dwelling.
    This restriction does not apply where the interest acquired was the grant or assignment of a
    lease with less than 21 years to run.
    If the property is purchased jointly, all the purchasers must meet these conditions
    • p00hsticks
    • By p00hsticks 10th Nov 18, 2:54 PM
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    p00hsticks
    The higher rate laws back in April did affect me because at the time I owned a property and exchanged on a second one. It was because of the fact that the law was retrospective that I was forced to sell my other property, even though I exchanged 2 months before the law was introduced.

    By the time of completion I had already sold my other property and this was my only property in the UK and I paid 16k stamp duty in August, which from what I understand wouldn't apply today
    Originally posted by nkomp18
    SDLT is payable on completion, not on exchange. As you had sold your existing property prior to competion on the second you wouldn't (shouldn't) have paid the additional 3% SDLT. Even if you had retained the property, if you had completed on the new purchase prior to April 2016 you would not have had to have paid the extra. You would have been aware of this legislation at the point you exchanged, as its introduction had been announced in November 2015.

    As you have previously owned a property you wouldn't qualify for the first time buyer SDLT relief.

    Without knowing how much the property cost it;s not possible to say if £16k is too much, too little or just right.
    Last edited by p00hsticks; 10-11-2018 at 2:58 PM.
    • nkomp18
    • By nkomp18 10th Nov 18, 9:35 PM
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    nkomp18
    Property is just short of £500,000.

    Is 16k just about right then? And wouldn't it be zero had I completed today instead of August?
    • SDLT Geek
    • By SDLT Geek 10th Nov 18, 9:47 PM
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    SDLT Geek
    It sounds as if you paid a little too much SDLT. It would have been £15,000 if the price was £500,000 and you say your price was under that.


    This is assuming that the standard rates of SDLT apply; so that at the date of completion of the purchase this was your only property in the world and you did not have another one "counting against" you.
    Last edited by SDLT Geek; 11-11-2018 at 7:23 AM. Reason: To add my assumption.
    • noh
    • By noh 10th Nov 18, 10:04 PM
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    noh
    The higher rate laws back in April did affect me because at the time I owned a property and exchanged on a second one. It was because of the fact that the law was retrospective that I was forced to sell my other property, even though I exchanged 2 months before the law was introduced.

    By the time of completion I had already sold my other property and this was my only property in the UK and I paid 16k stamp duty in August, which from what I understand wouldn't apply today
    Originally posted by nkomp18
    At completion did you own property anywhere else outside of the UK?
    • Tom99
    • By Tom99 11th Nov 18, 1:33 AM
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    Tom99
    Property is just short of £500,000.

    Is 16k just about right then? And wouldn't it be zero had I completed today instead of August?
    Originally posted by nkomp18

    Normal stamp duty, not an additional property and not a FTB on £500,000 in August 2018 and now:
    £125,000 to £250,000 @ 2% = £2,500
    £250,000 to £500,000 @ 5% = £12,500
    Total £15,000
    You are not due a refund because of any change in the budget because you are not the FTB of a shared ownership property.
    Adjust the above formula for your price of a bit less than £500,000 then look at your completion statement for the exact amount paid in stamp duty. Don't include any of your solicitor's fees for filing the stamp duty return.
    If you still think you overpaid contact your solicitor.
    • nkomp18
    • By nkomp18 11th Nov 18, 9:27 AM
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    nkomp18
    Alright, thanks.

    I didn't own property anywhere else in the world either. So would I have paid zero if I had completed today instead of August?
    • Tom99
    • By Tom99 11th Nov 18, 9:34 AM
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    Tom99
    Alright, thanks.

    I didn't own property anywhere else in the world either. So would I have paid zero if I had completed today instead of August?
    Originally posted by nkomp18
    No you would not have paid zero, why do you keep thinking that?
    On £500,000 you would have paid £15,000 in August and £15,000 now, no change.
    • sheramber
    • By sheramber 11th Nov 18, 12:54 PM
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    sheramber
    Alright, thanks.

    I didn't own property anywhere else in the world either. So would I have paid zero if I had completed today instead of August?
    Originally posted by nkomp18

    But you had previously owned one abroad so you were not and are not a first time buyer. That term applies to someone who has not previously owned a dwelling any where in the world.
    The fact that you sold it before completion on your house did not make you a first time buyer.

    It does ,however, mean that you did not have to pay the additional 3% stamp duty for owning a second home.

    You did still need to pay the ordinary stamp duty.
    • paulinefromtheuk
    • By paulinefromtheuk 11th Nov 18, 1:14 PM
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    paulinefromtheuk
    FYI. A FTB is a person that has NEVER bought a property in England and Wales. In addition to that, a couple for example where one is a FTB and another is not will not get the FTB reductions is my understanding but check with your mortgage advisor to be 100% certain.

    Stm duty increases have never been retrospective.
    • Tom99
    • By Tom99 11th Nov 18, 1:45 PM
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    Tom99
    FYI. A FTB is a person that has NEVER bought owned a property dwelling in England and Wales the world. In addition to that, a couple for example where one is a FTB and another is not will not get the FTB reductions is my understanding but check with your mortgage advisor to be 100% certain.

    Stm duty increases have never been retrospective.
    Originally posted by paulinefromtheuk
    The budget introduced FTB relief for shared ownership purchases where the purchaser elects to pay stamp duty only on the price paid for the share they are first buying.
    This was retrospective back to November 2017.
    Last edited by Tom99; 11-11-2018 at 1:47 PM.
    • nkomp18
    • By nkomp18 11th Nov 18, 1:49 PM
    • 170 Posts
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    nkomp18
    Okay thank you guys
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