How much in the way of refunds might HMRC have to pay to buyers of additional homes who will be entitled to ask for a slice back of the Stamp Duty they have paid?
HMRC has reported that since implementing a 3% surcharge in Stamp Duty on the purchasers of second homes, there has been a 20% increase in revenue – equal to an extra £2bn in tax.
The surcharge was brought in on April 1, 2016, and was meant to be aimed at buy-to-let landlords and purchasers of second homes such as holiday cottages.
But also caught in the surcharge are others, including owner-occupiers who buy a new home before they have sold their previous one.
They have to pay the extra 3% – but can reclaim it if and when they sell, or dispose of their stake in, the earlier property within three years.
The extra £2bn, to the end of July, was announced by HMRC. At the same time, though, the Government announced it had also had to refund £127m in Stamp Duty to 10,700 people at an average cost of £11,869.
But is enough being made of the potential refunds to come, given that the tax is only 18 months or so old?
One agent thinks not.
David Cantell, of Cantell & Co in Richmond, Surrey, says that his firm has agreed 32 sales so far this year. Ten of these purchasers have paid the additional 3% surcharge, generating an extra £300,000 in Stamp Duty between them.
However, all ten will be selling their former homes within three years of their purchases, so will need to be refunded that 3% surcharge.
Cantell said: “It’s quite conceivable there could be 7,000 similar situations and possibly more across England and Wales, equating to a lot of refunds.
“I think it’s vitally important the public are given all the facts.
“PR spin claiming the surcharge should be hailed a success cannot be quantified.
“Transaction levels have been crippled, with fewer properties for sale and less choice for home buyers. Sellers won’t sell because they can’t be confident of finding another home.
“I hope that this has been taken into account by the Government and the scale of potential refunds not underestimated.”
It is an ill conceived tax. It has caught a lot of people who I do not think it was designed for. Marriage splits, offspring who purchased homes together and are now moving in with new partners, old people who need to buy a smaller property for health reasons etc. A large proportion of those who it has caught will get a refund, the cost of running the scheme could be marginal in the end, the damage to the property market is immense. This current government have been an absolute joke, whatever happened to Mrs T’s home ownership drive? Cameron & Osbourne (Laurel & Hardy) will go down in history as possibly the worst double act, closely followed by May & Hammond. The scary thing is that Corbyn looks the most likely candidate for the job, how the f did that happen?
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