Breaking Property News 25/02/25
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Stamp Duty Land Tax in the news again for all the wrong reasons
Why some buyers can save on SDLT fees by using SCA Tax
With just over a month for homebuyers to complete by the 31st of March 2025, or before to beat the revised higher levels of SDLT, there seems to a media frenzy around the topic. Focusing on the unfairness of it all and the Chancellor’s and HMRC’s gain from this new tax regime.
‘An estimated 74,000 homebuyers, including 25,000 first-time buyers, are predicted to overshoot the deadline when stamp duty becomes more expensive and pay £142 million in extra tax, according to analysis by the property portal Rightmove.
From April 1 the property purchase tax will kick in at a price of £300,000, rather than £425,000, for first-time buyers. For non-first-time buyers, the starting threshold will go down to £125,000 from £250,000.
The change, which was confirmed by the chancellor Rachel Reeves in her budget, will affect buyers in London, the east and the southeast the most, because prices there are highest and go furthest with most frequency over the tax-free threshold.
Rightmove calculates that 74,000 buyers going through the completion process will miss the deadline and complete in April, incurring a collective £142 million more in stamp duty. This includes 25,000 first-time buyers who will pay £34 million of this figure’. – (Source The Times 25th Feb 2025 David Byers – Deputy Property editor).
Whilst all the hype and consternation about an extra fiscal burden on buyers is to be expected, what rarely is focused upon is that despite any tinkering by a Chancellor of the exchequer, there are a number of legitimate ways that buyers or even property buying companies can reduce or actually pay zero in SDLT, all it takes is specialist knowledge from companies like SCA Tax.
SCA tax (Advisory) not only can look at your current SDLT liability, but they can also review historical transactions going back 48-months, and if there is a fit, make claim to HMRC. They also give guidance before a purchase is made to ensure any SDLT provision is correctly assessed. As many people and especially property buying companies ‘overpay’ their tax, and unless a claim is made for a refund, it is unlikely HMRC would be aware of the error in their favour.
There are according to the Gov.UK website Reliefs and exemptions where,
‘You may be eligible for Stamp Duty Land Tax (SDLT) reliefs if you are buying your first home and in certain other situations. These reliefs can reduce the amount of tax you pay. You must complete an SDLT return to claim relief, even if no tax is due.
HM Revenue and Customs (HMRC) has guidance on SDLT reliefs for: first-time buyers, building companies buying an individual’s home, employers buying an employee’s house, local councils making compulsory purchases, property developers providing amenities to communities, companies transferring property to another company, charities buying for charitable purposes, right to buy properties, registered providers of social housing, Crown employees, property investment funds, for example Property Authorised Investment Funds (PAIFs) and Co-ownership Authorised Contractual Schemes (CoACSs)’.
But to ensure that you get the definitive correct information as there are a whole host of variables, it pays to speak directly to a specialist company who has advised a large number of clients.
To my mind, one of the biggest wins, with an extra 5% tax already being added by Rachel Reeves the Chancellor to the purchase of a second home, will be for property traders, a company or partnership that carries out the business of buying and selling properties, when buying a probate property from a deceased estate. As they can if the circumstances are in place can pay nil SDLT to the HMRC.
As Simon Barnes posted on social media recently, (Simon works for SCA Tax) ‘We are offering free stamp duty reassessments. there are 29 different types of stamp duty relief including probate relief and one in four were over charged. if you have bought property in last 48-months I urge you to get in contact.
Our team will examine previous transactions from the last four years and quickly determine whether there is a likelihood that an overpayment of SDLT has occurred. If it has, we can write to HMRC, laying out the technical details, and why we feel that an overpayment has been made.
At the successful conclusion of this, a refund cheque from HMRC is issued to the taxpayer. It is really that simple – no fuss, no hassle and best of all – no fee unless and until there is a refund from HMRC – the only time when you will be pleased to see that brown envelope drop through your letterbox.’
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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