When purchasing a second home, owners are compelled to pay an additional 3% stamp duty land tax (SDLT) on top of the normal SDLT rates applicable to their homes. If however, the second property purchase is a replacement for the taxpayer’s existing main residence which is yet to be sold, homeowners may meet the criteria to receive a refund on the additional 3% SDLT paid once the existing property is sold.
In order to qualify for the refund on the additional SDLT paid, that the original property should be sold with 36 months of the purchase of the second property, which then becomes their primary residence. The refund will apply once the original property is sold.
Due to the current Covid-19 pandemic and the lockdown imposed by the UK government in March 2020, the property market has come to a standstill. This has caused many house sales to a halt or be subject to significant delays, resulting in some property sales to fall outside the 3-year window for relief.
As such, the Government have announced where the 3 year deadline period for the sale of your first bought primary residence, was from January 2020 onwards, a grant of an extension will be given if the homeowner writes to HMRC requesting the extended relief period and thus the refund.
If you expect you fall into the above criteria and would like to discuss your options, please do not hesitate to contact us.
