Are Your Stamp Duty Sums Correct?
Thursday, October 25, 2018
HMRC recently stated that over 15,000 buyers overpaid their stamp duty last year. Despite the eye watering sums of money involved, some buyers are getting their tax calculations wrong, prompting potential movers to defer moving and sit tight, whilst others significantly overpaid. So why the confusion?
The most common mistakes concern liability for the 3% “additional property” surcharge and the assumption that owning any other property means that a buyer is liable for this. However, it should not be applied when the buyer is replacing their “principal place of residence” and you have a period of three years to claim the 3% surcharge back, if you move before selling your previous home.
Mixed use properties also create confusion over SDLT. Where a purchase includes offices for example, commercial SDLT rates and other taxes may apply instead.
If you are buying multiple dwellings in a single transaction, some relief is also likely to be available. In this instance, the calculations should take into account an individual average property price, as opposed to taxing the total property sum. In such cases, HMRC may review on a case-by-case basis.
If you’re looking for a quick stamp duty calculation to factor into the potential cost of your next move, try our stamp duty calculator, or for more complex issues call your local Frost office and we’ll put you in touch with an expert.