The Government has handed back £127m stamp duty to 10,700 homeowners who overpaid following the introduction of the controversial "second property surcharge" in April 2016. An additional 3pc surcharge on second properties was introduced last year as a measure aimed to slow the growth of buy-to-let. But it quickly drew criticism, including from those home-movers who buy their next property before selling their current one. Under a “replacement main residence” rule, people who do this who must pay the higher stamp duty rate upfront. They are then eligible for a refund if they sell their former home within three years. Government figures, released today, reveal HMRC has had to give refunds on 10,700 transactions at an average cost of £11,869. Lucy Brennan, a partner at accountancy firm Saffery Champness, said having to make a payment of that size could prevent families from moving on to their ideal property. Nimesh Shah, a partner at tax advisers Blick Rothenberg, also branded the system of up-front payments unfair. "Not everyone has £12,000 to pay up front," he said. "There’s a case for the Government to change that mechanism. The rule should be that if you do not in future sell the original property, then HMRC can come knocking."
The UK government has refunded £127m ($165m) in stamp duty tax to 10,700 homeowners, who paid too much after the introduction of the 3% "second property surcharge" in April of last year. The measure was implemented to slow the buy-to-let boom, but critics said that it hampered homeowners who bought a second property before selling their first. Saffery Champness has been obligated to repay transactions at an average cost of £11,869 each.