Thousands of ordinary homemovers are being forced to pay extra Stamp Duty and HMRC has already refunded £160MILLION
So far 15,000 homeowners have been wrongly caught up in extra Stamp Duty fees since April 2016... here's how to find out if you're owed money
HMRC has paid back around £160 MILLION to ordinary homeowners who have been wrongly charged extra Stamp Duty when they moved house.
At least 15,000 people have so far received a payout from the Treasury after being wrongly charged excess upfront fees.
The government introduced new rules in April last year that saw a three per cent surcharge for people who are buying a second home.
But the latest figures from HMRC show that ordinary homeowners are being caught up paying the added tax when there's a crossover between buying their new house and selling their old one.
Buyers who complete on their new home before they sell their current home will face the extra fees because technically they own two homes.
Movers can claim their money back within three years but the lack of a grace period means that some movers are being left out of pocket thanks to being forced to fork out thousands more upfront.
Everyone has to pay Stamp Duty or land tax when they're moving house but if it's a second home, like a holiday home, then you'll have to stump up extra.
People who are caught up in the system have no choice but to the pay the upfront costs and then claim it back later, which could leave some homeowners unable to move.
Those extra charges some people have to pay will shock you.
Someone purchasing an average priced property of £320,168 in the South East could find themselves having to cough up an extra £15,613 when they were expecting a stamp duty bill of £6,008.
Similarly someone buying a £130,000 property in North East England would have to pay £4,000 when they were only expecting to pay around £100.
Royal London insurers is calling for a year's grace period to be introduced because house sales that fall through can leave families in "severe financial hardship".
A HMRC spokesperson told The Sun Online it was only a small percentage of people who have to claim a refund.
They said: "For those that see the sale of their house fall through and then unexpectedly encounter higher SDLT payments, we would encourage them to claim as soon as possible after they’ve sold their previous main residence."
How do I get my money back?
YOU may be owed a refund if you sold your house within the past three years and paid the higher stamp duty rates.
You'll need to claim for the refund as you won't be repaid the money you're owed automatically.
It's free to apply for a refund from HMRC so if you're using an agent, make sure they don't charge you any application fees.
You can claim a .
What is Stamp Duty?
Stamp Duty or land tax is a lump sum that anyone buying a property that costs more than £40,000 has to pay.
How much you pay depends on how much the property is worth.
For example, Bertie buys a house for £200,000. He pays three per cent tax on the first £125,000, which works out as £3,750.
Bertie also has to pay five per cent tax on the remaining £75,000 which is also £3,750.
So the total stamp duty he has to pay is £7,500.
Why did the system need to be changed?
Before, buyers would have to pay one per cent tax on property worth between £125,000 and £250,000, and three per cent between £250,000 and £500,000.
So that would mean that if you had a property worth £300,000 you would have to pay £9,000 in stamp duty, even though you were only slightly over the threshold.
STUCK IN A RUT Stamp Duty is the reason many young families are unable to move home – but what are the options?
It also meant that if you are buying a second home, you would need to pay an extra percentage per price bracket.
The new system was introduced in April 2016 to try and make it fairer but it's actually wrongly hitting ordinary homeowners too.
Recently, we reported how some developers now offer to pay Stamp Duty for some buyers and looked into how it could actually just be pushing up the cost of houses and stifling the property market.
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