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Q: My client has purchased a residential property that will be used as their main home. They have not yet sold their previous home but are in the process of doing so. The client has also owned a buy to let property for many years that they have never lived in and has always been let to tenants. Will the additional 3% rate of SDLT for second properties apply to the purchase of the new home?

A: If the previous home has not been sold before the new one is purchased then the additional 3% rate (4% if the property is in Scotland (LBTT) or Wales(LTT)) will apply on the purchase of the new home. However, if the previous home is sold within 36 months (18 months if the property is in Scotland) of the purchase of the new home then relief is available for the replacement of their main residence and a claim can be made for a refund of the additional 3%/4% duty that was paid.

The refund is claimed by amending the original return within 12 months of the later of;

a) the effective date of the disposal of the previous main residence, or
b) the filing deadline for the return.

Disclaimer

These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.

About Markel Tax

Markel Tax offers expert advice on UK tax and VAT via its helpline and provides monthly FAQs with questions and answers on common tax issues for businesses and practitioners.

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