Can You Obtain Stamp Duty Land Tax (SDLT) Refunds on Auction Properties in the UK?

The tax payable when buying a property in England and Northern Ireland is Stamp Duty Land Tax (SDLT). In Scotland the tax is called Land and Buildings Transaction Tax (LBTT).  In Wales it is called Land Transaction Tax (LTT).   These taxes are calculated in a similar manner and are based on the purchase price of your property and vary according to whether it's a residential or non-residential property, and whether you're a first-time buyer. Stampback, help their clients check they have paid the correct amount of tax and seek a refund where necessary.


What are the Stamp Duty Land Tax (SDLT) bands on Properties in the UK?

In England and Northern Ireland:

For residential properties worth more than £250,000, the tax rates are:

  • 0% up to £250,000

  • 5% on properties above £250,000 and up to £925,000

  • 10% on properties above £925,000 and up to £1.5 million

  • 12% on properties above £1.5 million

For non-residential properties worth more than £150,000 the SDLT rates are:

  • 0% up to £150,000

  • 2% on properties above £150,000 and up to £250,000

  • 5% on properties above £250,000


In Wales:

  • Land Transaction Tax (LTT)

  • 0% up to and including £225,000

  • 6% over £225,000 up to and including £400,000

  • 7.5% over £400,000 up to and including £750,000

  • 10% over £750,000 up to and including £1,500,000

  • 12% over £1,500,000


In Scotland: 

  • Land and Buildings Transaction Tax (LBTT) 

  • 0% Up to £145,000

  • 2% Above £145,000 and up to £250,000

  • 5% Above £250,000 and up to £325,000

  • 10% Above £325,000 and up to £750,000

  • 12% Above £750,000


Frequently Asked Questions:

1. Is it possible to obtain refunds of Stamp Duty Land Tax (SDLT) on properties purchased at auction?

Properties purchased at auction are treated the same as any other properties, if the details of the purchaser and the transaction fit the criteria then refunds are available.  In some cases properties purchased at auction are exempt from SDLT, this depends very much on the circumstances of both the seller and the purchaser.  Refunds of Stamp Duty Land Tax (SDLT) on properties sold in both residential and commercial auctions can qualify for refunds of SDLT.  The majority of refunds we obtain for clients are on properties purchased at auction.  

2. Do all non-residential properties offered for sale by auction attract the same rate of Stamp Duty Land Tax (SDLT)?  This is what the HMRC online SDLT Calculator seems to suggest.

No, the HMRC online SDLT Calculator only allows you to input the most basic of details.  HMRC themselves insist that it is only a guide.  Auction purchases that involve multiple residential units or a mixture of residential and commercial properties will incur SDLT at different rates to say a vacant warehouse or an empty factory. 

 

3. What should I do if I have purchased a property comprising multiple residential units or a mixture of commercial and residential elements?

You should contact Stampback with details of your purchase.  With purchases such as these you only have 12 months from the date of paying your SDLT to claim a refund.


4.How long do I have to pay my Stamp Duty Land Tax (SDLT) after completing a purchase?

The deadline for paying your SDLT on an auction purchase is the same as any other property, 14 days after completion.  


5. Are there examples of refunds obtained for clients who have purchased at auction on your website? 

Yes, there are examples of both purchases that include multiple residential units and mixed commercial/residential purchases.  


6. What type of properties do Stampback’s clients purchase at auction?

There are a range of properties that clients of ours purchase at auction, but the most common types of purchasers are:

  • Houses and buildings arranged as flats

  • Commercial properties

  • Commercial properties with multiple residential units

  • Derelict properties

  • Part built properties 

  • Properties with planning permission


7. Does it take longer to obtain a Stamp Duty Land Tax (SDLT) refund on an auction property?

No, whether properties are bought at auction or on a private treaty basis the amount of time taken to obtain a refund of Stamp Duty Land Tax (SDLT) is the same.  There are no differences.


8. Is it possible to obtain more than one refund of Stamp Duty Land Tax (SDLT) on the same property or the same properties purchased in one transaction?

Yes, whether the transaction was a private treaty matter or an auction sale it is possible to obtain more than one type of refund of Stamp Duty Land Tax (SDLT).  For example, on a block of flats it would be possible to obtain a refund basis on the number of units purchased and it may then be possible to obtain a further refund based on the condition on some or all of the units.  This subject can be quite complex, please ask Stampback for more details.


9. Do purchases of second homes and investment properties at auction incur Higher Rate Additional Duty (HRAD) SDLT in the same way as a purchase by private treaty?

Yes, the rates in England and Northern Ireland are:

  • 3% Up to £250,000

  • 8% Above £250,000 and up to £925,000

  • 13% Above £925,000 and up to £1,500,000

  • 15% Above £1,500,000

Lucas Vitale