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24 January 2020
Andy Wood
Replacement of Main Residence Exception – Stamp Duty 3% Surcharge – Introduction
This article considers the ‘three-year rule’ on the replacement of an only or main residence that acts as an exception to the 3% stamp duty land tax surcharge on additional properties.
General
Where a taxpayer sells their former main residence after buying their new home then it is possible to claim an SDLT refund of the 3% surcharge. This may still be the case where the buyer owns other properties in addition.
In such a scenario at the end of the day of the transaction (the purchase of the new house) the buyer will own two or more dwellings. As such, the 3% surcharge is triggered on the purchase.
Can this 3% additional tax liability be claimed if the former main residence is subsequently sold?
The answer is yes. But there are conditions that must be satisfied.
Each of the following conditions must be satisfied:
General
Here, the buyer has sold their old home before, or at the same time, they purchased the new main residence. However, the taxpayer also owned interests in other properties.
In the absence of any relief, the purchase of the new home would be subject to the 3% surcharge.
However, there is a relief but, again, there are conditions which must be satisfied.
Each of the following conditions must be satisfied:
The relief may only be claimed by individuals
The relief is only available to individuals – as such, a company could not claim the relief.
If you have any queries about the replacement of main residence exception, or would like some assistance in claiming an SDLT refund, then please let us know.