Huge rise in Stamp Duty refund cases reported during lockdown

Homebuyers sometimes overpay Stamp Duty because their conveyancers either don’t have the information they need to decide that a Stamp Duty tax relief applies, or they wrongly decide that a relief cannot be claimed. 

Conveyancers, on the whole, take a conservative view – many prefer not to make a claim if there is any doubt, so that they do not risk coming into conflict with HMRC.

Speaking to Estate Agent Today, London barrister Patrick Cannon says the surge is linked to the crisis because many more home owners and property investors have had time to investigate the problem of over-paid Stamp Duty.

“Stamp Duty is higher for residential properties, but the rules are so complex that many conveyancers and advisers fail to understand them properly,” explains Cannon.

“Some think that the three per cent additional rates are payable when they are not. In other instances, they fail to factor in multiple dwellings relief, where a property has more than one self-contained unit, such as a house with an annex.

“Alternatively, those who buy a mixed-use property – i.e. both residential and non-residential – are eligible to pay lower rates of stamp duty, but the definition of what is a mixed-use property is currently a matter of debate with HMRC. There are several cases currently before the Upper Tribunal awaiting a clearer definition.”

He adds that having worked in the sector for many years, 2020 is the busiest he has seen in terms of refund cases, typically in instances when stamp duty relief applies such as on second homes, mixed use properties and multiple-dwellings.

In recent weeks, in response to the pandemic, HMRC has relaxed strict time limits on the payment of the three per cent surcharge.

In most cases the refund claim should be made to HMRC within 12 months and 14 days of completing the purchase, but in certain cases, a period of four years is available. HMRC’s Stamp Duty calculator enables property owners to work out the rates of stamp duty. 

Zah Azeem, Partner Scrivener Tibbatts concludes: “In our experience, many people find the process of claiming back their Stamp Duty complicated and time-consuming, especially after the inevitable stress of house-buying. But good professional advice is always worth its cost. Let us know if we can refer you to experts in this area.”

If you would like to discuss this or something related to a valuation please contact or call 020 8947 7040.