Stamp duty

[MrBet]

Hi,

I bought my first main residence last year and I had to pay the extra stamp duty because I already owned a rental property (which I've never lived in). I've now sold the rental property. Am I entitled to the extra stamp duty back? I can only find that you are entitled to the stamp duty being refunded if it was your main residence. Can anybody clarify?

[anonymous-user]

Because you didn’t ever live in the other property, you haven’t replaced your main residence, so I say no, you can’t claim back the sdlt supplement

Here is the HMRC manual

https://www.gov.uk/hmrc-internal-manuals/stamp-dut...

And the key paragraph

“The test for the old dwelling is a question of objective fact, was the dwelling at some point in a period the only or main residence of the individual who disposed of it?“

But do seek proper advice from someone who knows...

[drmotorsport]

Yes my understanding is that you would only get a refund on the extra stamp duty if you sold your previous primary residence with 3 years of purchase of the new primary residence.

[The Moose]

JPJPJP said:

Because you didn’t ever live in the other property, you haven’t replaced your main residence, so I say no, you can’t claim back the sdlt supplement

Here is the HMRC manual

https://www.gov.uk/hmrc-internal-manuals/stamp-dut...

And the key paragraph

“The test for the old dwelling is a question of objective fact, was the dwelling at some point in a period the only or main residence of the individual who disposed of it?“

But do seek proper advice from someone who knows...

But it was his only residence, no?

[anonymous-user]

He never lived in it, so no, it was not his residence at all

[MrBet]

Thank you for the responses. From what I’m reading, I don’t think I’m going to be able to reclaim, but I’m going to run it past a specialist in SDLT that I’ve found, just in case! There seems to have been a lot of challenges to the extra 3% stamp since it’s been introduced by HMRC. But I can’t seem to find a similar scenario to mine.

[DKL]

JPJPJP said:

He never lived in it, so no, it was not his residence at all

But if HMRC charged him the higher rate duty this time because he owned a property (but not a residence as he didn't live there) then he should be able to reclaim it by the same token. They can't have it both ways surely.
He had 2 properties and now has one. If it worked on "residences" he didn't own one in the first place.

[vdn]

To be honest; In your case; I wouldn’t have paid the extra stamp duty in the first place. Fingers crossed you can reclaim it.

[996owner]

DKL said:

JPJPJP said:

He never lived in it, so no, it was not his residence at all

But if HMRC charged him the higher rate duty this time because he owned a property (but not a residence as he didn't live there) then he should be able to reclaim it by the same token. They can't have it both ways surely.
He had 2 properties and now has one. If it worked on "residences" he didn't own one in the first place.

They can have it both ways apparently....

We move out of our main residence back in 2011 and let it out (was out only property at the time) We rented until June this year. We bought out new house as a main residence for us to live in, higher rate applied. I argued that it was out main residence, response was "will this purchase result in you owning more properties than before the purchase? = yes Higher rate.. I was told if I sold our BTL within 3 years I would therefore drop back to 1 property and the extra we paid will be refunded.. I don't hold much hope thou.


edit to add
Right just rang HMRC I was advised if we sell our BTL we can get a refund on higher rate within 3 years of purchase.
so OP should get a refund too. It seems to be all about putting a house back on the market SDLT helpline is 0300 200 3510 I selected option 6. Adviser said it was a grey area/ a bit complicated !

Edited by 996owner on Monday 30th December 14:01

[anonymous-user]

The key difference (imo) is that you lived in the property. OP did not

[996owner]

JPJPJP said:

The key difference (imo) is that you lived in the property. OP did not

yes true but the question asked is "Will purchasing a property result in you owning 2 or more houses/properties" if so then extra is charged until you sell one. Very grey area I guess when you haven't lived in it.

[anonymous-user]

Examples from the SDLT manual that support my position (which may still be wrong!)

The key phrase is "where a main residence has been replaced" which, in OP's case, does not apply.

https://www.gov.uk/hmrc-internal-manuals/stamp-dut...

"Example 5

Mr & Mrs C currently own a mixed use property, a shop with a flat above, both of which are rented out. They currently live in rented accommodation but are in the process of purchasing a new property which will be their main residence.

The higher rates will apply to the purchase by Mr and Mrs C as they already own an interest in another residential property: the flat above the shop."

---

"Example 11

Mr K currently owns one buy-to-let property and is in the process of purchasing another one. He lives in rented accommodation. He may consider selling one of the properties within the next couple of years.

The higher rates will apply to the purchase of the second buy-to-let property as following the purchase Mr B will own an additional residential property and is not replacing his main residence. A refund will not be available if Mr K subsequently sells one of his buy-to-let properties as a refund is only available where a main residence has been replaced. "

[Alpinestars]

JPJPJP said:

The key difference (imo) is that you lived in the property. OP did not

Correct.

[NickXX]

The key part of the HMRC guidance is:

“A refund will be allowed in situations where a purchaser paid the higher rates of SDLT on the purchase of a new main residence and within 18 months disposes of a previous main residence.”