The trap was inadvertently created by the property market being frozen. In April 2016, the Government introduced an extra 3pc stamp duty surcharge on properties purchased in addition to a main residence. Buyers could apply for a refund of the extra tax they paid while purchasing a second home if they sold their old property within three years, and the new one became their primary home.
Properties sold on or before 28 October 2018
If you sold your previous main residence on 28 October 2018 or earlier, HMRC would normally require your request for a refund within 3 months of the sale of that previous main residence, or within 12 months of the filing date of the Stamp Duty return relating to the new residence, whichever is later.
Properties sold on or after 29 October 2018
If you sold your previous main residence on 29 October 2018 or later, HMRC would normally require your request to be made within 12 months of the sale of that previous main residence, or within 12 months of the filing date of the Stamp Duty return relating to the new residence, whichever is later.
Exceptional circumstances
HMRC has agreed that you may still be able to apply for a refund, if you purchased your new home on or after 1 January 2017 and were unable to sell your previous home within 3 years if the delay in selling is because of reasons outside of your control. These may be, but are not limited to:
- the impact of COVID-19 preventing the sale
- an action taken by a public authority preventing the sale
Once the reason has ended, you must sell the previous home to be able to apply for the refund. You can then write to HMRC and include:
- an explanation on why you were unable to sell your previous main home within 3 years
- the other required information on the refund request form
