Stamp duty must be paid when you buy property or land in the UK above a certain value, however, there are several instances where you may be eligible to claim back on this tax. In fact, HMRC, who is responsible for the collection of taxes, estimates that over £2 billion in stamp duty is overpaid each year. People overpay due to many reasons, one being that professionals make mistakes when filing a tax return on homebuyers behalf. 

Generally, stamp duty must be paid within 30 days of the date of the property that was purchased. This process can be complex, and there are many exemptions and loopholes that apply, so it’s no surprise that many people across the UK overpay in stamp duty.

As the overpaying of stamp duty is such a common issue, this makes it all the more important that you are familiar with the reasons why you may be eligible for stamp duty relief; with this knowledge, you may begin the process of claiming back on this tax. Find out how to claim back stamp duty in this article. 

Am I Eligible for a Stamp Duty Refund? 

First, you need to know if you are eligible for a stamp duty refund. Whether you filed your stamp duty yourself or someone else did it on your behalf, you may find that you’re eligible for a rebate. 

Some common reasons why people are eligible for a stamp duty refund are: 

  • If you are a first time buyer purchasing a property under £425,000
  • If you purchase a second property but sell your original property in under three years
  • If local authorities make a compulsory purchase of a property in order to sell to a third party for development
  • Property developers are subject to planning obligations
  • Charities
  • Non-UK crown employees
  • The property is uninhabitable 

When Can You Claim Stamp Duty Back?

The deadline is usually 12 months and 14 days from when you paid the stamp duty. In extremely limited circumstances that deadline can be extended up to 4 years and 14 days. 

If you are too late to claim the repayment from HMRC, you can bring a court claim against a professional advisor if their advice or work was negligent and it caused you to overpay.

Once you are certain you are eligible for a refund, you can apply for one through the above methods, either claiming against your conveyancer or estate agent or through the HMRC directly. Alternatively, you can use a stamp duty rebate company that specialises in dealing with stamp duty claims. 

How to Make a Stamp Duty Rebate Claim

There are two ways in which you can apply for a refund of overpaid stamp duty. Both will require the claim to be brought within 12 months and 14 days from the date of payment of the tax. The process can be done by yourself, through a conveyancer, solicitor or estate agent or through a company that specialises in handling stamp duty rebates. 

The process is relatively straightforward and can be done online or by post. 

If you claim against your conveyancer or estate agent, this would involve professional negligence Court proceedings to be brought against the solicitor who dealt with the purchase of the property and paid stamp duty to HMRC on your behalf.

However, if you make a claim to HMRC you may fill in a tax return form online. For the application of this refund, you will not need to use a solicitor or an accountant. You can apply using an online form by creating a Government Gateway user ID and password and posting it to the HMRC. 

Information the HMRC will require will include:

  • Your name and address
  • Details of the property that attracted the higher rates of SDLT, including the date of purchase and Stamp Duty Land Tax (SDLT) unique transaction reference number
  • Details of the home you’ve sold, including the date of sale, address of the property, name of the buyer
  • Amount of tax paid on the property that attracted the higher rates of SDLT
  • How much tax you’re asking for a repayment of
  • Bank account and sort code details of the person to receive the payment

HMRC will aim to process the repayment within 15 working days of the date it receives a complete account of the above information.