As many know, through painful experience or otherwise, buyers must pay a 3% SDLT surcharge if they purchase a residential dwelling whilst at completion they own more than one dwelling. Buyers can claim a refund of this additional SDLT if they buy a new property and then sell their previous main dwelling at a later date (i.e. buy first, sell later).

HMRC have now published an 'exceptional circumstances' update, which may help some buyers to claim the refund, if the sale of the previous main dwelling is affected by the impact of the coronavirus situation.

Under normal circumstances, in order to claim a refund of the 3% SDLT, the previous main residence must be sold within 3 years of buying the new property – e.g. if you bought a new house on 1 May 2017 then you would have needed to have sold your previous home (which need not be in the UK) on or before 1 May 2020 to claim the refund. However, the HMRC’s update now states that they will extend the 3 year time limit where the sale of the previous home was delayed due to exceptional circumstances such as the impact of coronavirus.

Once the exceptional circumstance has ended, the previous main dwelling must be sold before HMRC will consider whether the circumstances were exceptional. It is a question of fact and degree and each case will be considered on its own merits. There is no pre-transaction clearance facility.

This extension of the time limit only applies where the new main residence was purchased on or after 1 January 2017.  

Whilst not the wholesale review of stamp duty that some had been calling for, this will assist some, should they find themselves unable to sell because of the pandemic.