Could you have overpaid stamp duty on your property purchase?


Thousands of property buyers are looking to save money on their next purchase thanks to the stamp duty holiday. But overpaid stamp duty could still be an issue…

Stamp duty land tax (SDLT) is payable on all property purchases in England above a certain value. It brings in around £13bn each year for the Treasury, but it seems that some buyers may be paying more than they owe. The myriad of exceptions, reliefs and government changes can make this tax more complicated than it first appears.

According to research from Cornerstone Tax, HMRC needs to address this lack of clarity “urgently”. With an estimated £3bn worth of stamp duty being overpaid in the tax year 2015/2016, getting it right is essential for buyers to avoid paying unnecessary costs.

David Hannah, founder of the advisory firm, believes the overpaid stamp duty is sometimes a mistake on the part of the solicitor.

He says: “The mistakes being made are in almost all cases totally unintentional and otherwise made in fear of underpaying. Most legal professionals are ill-equipped to navigate the complex rules around it and need help.”

“The law around SDLT is incredibly complex and many advisors who help homebuyers evaluate how much they should pay are trained only to differentiate between residential and commercial property.”

Stamp duty for property investment

When it comes to property investment, things can become more complex. This can be a major culprit for overpaid stamp duty. But, says David Hannah, this is not always the case.

He says: “They [solicitors] simply aren’t familiar with the intricacies of the law’s evaluation criteria, which has led to many being mis-advised unintentionally. There are a number of other reasons why people have overpaid; it’s not always a misinterpretation of the 3% surcharge.”

Right now, the UK government has granted buyers a stamp duty holiday. This means that any home costing £500,000 or less is currently exempt from SDLT. This is with the exception of second homes or property investments, where buyers still pay the 3% surcharge.

The intricacies can be confusing

One study by the firm found that more than a third (36%) of homebuyers don’t trust the legal sector. They report feeling “ripped off” by solicitors, and a further 13% felt that their solicitor made mistakes and made them pay too much stamp duty.

A number of issues can arise when calculating a stamp duty bill. This includes whether it is an additional property, whether it is fully residential or mixed use, and whether you are buying multiple units.

For example, multiple dwellings relief allows property investors to calculate their bill differently. SDLT is worked out against the average purchase price of all dwellings in the transaction, rather than individually. But David Hannah says that it is “yet another addition to a maze of different exceptions and exemptions”.

He also points out that even the current stamp duty holiday can complicate things for buyers. One issue is that the short time limit could put solicitors and conveyancers under more pressure. Getting it right for buyers under a time restraint could mean delays and even miscalculations.

He adds: “What is stamp duty land tax? It’s the tax nobody really speaks about until it’s too late. The tax the average homeowner dismisses as something their solicitor can deal with.”

“The tax most solicitors fail to appreciate the full nuance of – until a claim is made against them.”

If you need advice on stamp duty for your property purchase, our independent tax partners can help. Get in touch for more information. You can also sign up for free for early access to our our property investment opportunities.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Could you have overpaid stamp duty on your property purchase?


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.