Can we get a refund if we've wrongly paid extra stamp duty?

12 February 2018


My wife and I have just purchased a property. My wife owns two buy-to-let properties, but her main residence has been the rental home we have shared for the past 10 years. I am a first-time buyer. Our solicitor advised us that we had to pay the additional rate of stamp duty, which we did, but now I think that might have been incorrect. I’ve seen that there is a clause that says you don’t have to pay the higher stamp duty rate if you are replacing your main residence, which we were. Can we get our money back? 



I can see how you got your hopes up on this one. If you fill out the stamp duty calculator on the government’s own website it would appear you don’t have to pay the additional rate as you were replacing your main residence.

However, your solicitor gave you the right advice. The main residence clause doesn’t apply to you as you rented what you consider to have been your main residence. I spoke to HMRC and, for stamp duty purposes, it defines a main residence as having to be a property that you own. So, because your wife already owns property, and you weren’t replacing either of her buy to lets, you do have to pay the additional stamp duty rate.

What is particularly unfair is that if your wife ever decides to sell one or both of her buy-to-let properties they won’t be classed as your primary residence for capital gains tax purposes. When defining that, HMRC says you must have lived in a property for it to class as a primary residence.

So, you fall into a small but nasty trap that means you’ll get stung by the taxman twice. 

Ruth Jackson is a personal fincance journalist. Find out who our experts are on the Ask the Experts homepage.