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News 3
Stamp Duty (SDLT) Refund for Homeowners

Gemma Bath, Head of Residential Property looks at who is eligible for HMRC’s 'exceptional circumstances' extension for stamp duty surcharge, aimed at helping homeowners who have been unable to sell their home within three years of purchasing a replacement property because of the COVID-19 crisis.

The past months have been uncertain times for those buying and selling property and since lockdown restrictions were implemented in March it is estimated that over 450,000 people have had to put their plans to move on hold. Despite these somewhat gloomy predictions, the property market is currently going from strength to strength. We have been inundated with enquiries for new transactions and those that were frozen during the lockdown period are once again progressing.

Higher Rates for Additional Dwellings (HRAD)

There is further good news for homeowners in England who have been unable to sell their home within three years of purchasing a replacement property due to the COVID-19 crisis, and who may now still be able to claim a stamp duty land tax (SDLT) refund.

When a homeowner buys a property, if the property is not the only dwelling they own, they have to pay a higher rate of Stamp Duty Land Tax (SDLT). This is effectively a 3% surcharge and is known as the Higher Rates for Additional Dwellings (HRAD). Usually a payment of HRAD will only be refunded if the new property replaces the person's main home and the previous main home is sold within three years of buying the new home.

Following a written ministerial statement by Jesse Norman, Financial Secretary to the Treasury, HMRC has updated its guidance on exceptional circumstances for claiming an SDLT refund outside of this normal three year window. These exceptional circumstances can be applied in cases where the second property has been purchased on or after 1 January 2017.

Residential Property team

Do I qualify for the a refund?

In order to qualify for a refund, the following conditions must be met:

  • The homeowner was prevented from selling their previous main residence before the expiry of the three year time limit due to a reason/ exceptional circumstances beyond their control in particular, the impact of the COVID-19 crisis in preventing the sale, and/or an action taken by a public authority preventing the sale - which could of course be COVID-19 related.
  • Once this reason has ended, the previous home must be sold as soon as reasonably possible to be able to apply for the refund. The claim for a refund must include an explanation of why the homeowner was unable to sell the previous home within three years.

Decisions on refunds will be made by HMRC on a case-by-case basis. However, HMRC has made it clear that reasons such as a downturn in the market or a shortage of funds due to the COVID-19 crisis, will not be considered as exceptional circumstances

For more information on the extension to the three year time limit, please see HMRC's Stamp Duty Land Tax Manual. For information on how to apply for refund please see GOV.UK.

For further advice on this issue and on buying and selling your home, please contact Gemma Bath, Head of Residential Property.

Before relying on this commentary please read the Reliance on information posted section in our Terms of Website Use in our Legal section. Please note that specialist advice should be taken in relation to any specific queries and the information above is provided for general information purposes only.


Gemma Bath

Head of Department
Residential Property


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