Tax update: SDLT deadline relaxed for main residence disposals

Published: Friday 19 June 2020

A 3% SDLT surcharge was introduced in April 2016 for the purchase of second homes. This charge also applies where a new main residence is purchased but where your previous home is not sold at the same time. It is, however, possible to claw back this surcharge if the old property is disposed of within three years.

With the coronavirus pandemic freezing the property market for a while, and with an ongoing impact on property disposals, HMRC has released updated guidance to extend this three-year time limit in certain circumstances.

Under the new guidance, new homes purchased on or after 1 January 2017 may still be eligible for a refund after the three-year window has expired if:

  • there are exceptional circumstances beyond their control from disposing of their old home within the three-year time limit; and
  • the old home is sold as soon as reasonably possible.

The guidance states that exceptional circumstances may include being prevented from selling the property due to government guidance during the coronavirus pandemic. 

HMRC has said that they will consider each case separately and it is only possible to put in a request for exceptional circumstances at the point a refund has been requested and once your old home has been sold.

The guidance also provides some examples of when exceptional circumstances may or may not apply, read here for further details.

Note that for sales of property in Scotland, the standard window for disposal is 18 months but, this has been temporarily extended to three years in light of COVID-19 for new homes which were purchased between 24 September 2018 and 24 March 2020.   

In Wales, there is a three-year disposal window as with England and Northern Ireland, however, at the time of writing there has been no relaxation to the rules for disposals of Welsh properties.

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Nick Haines
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