Rules on the 3% Stamp Duty surcharge are so confusing that even an experienced estate agent almost fell foul of them.
David Poole, a partner at Michael Poole estate and letting agents in Teesside, was buying a property with his wife Emma.
The couple were moving out of rented accommodation and it never crossed their minds that they would have to pay the surcharge. Poole had sold an earlier home over ten years previously.
However, they were told that because Emma owned two buy-to-let properties, they would have to pay an extra £14,160.
Poole, 35, said the first he knew that they would have to pay the surcharge was when his solicitor rang and told him.
He said: “I have worked in the property industry for 18 years and find it hard to believe how little information is available on the second-home charge.”
Poole, who has been an agent for 18 years, took other advice from solicitors and tax experts, and all said that the 3% surcharge was payable.
Even HMRC’s Stamp Duty calculator said the couple would be liable to pay the extra sum.
He and his wife ended up paying almost £28,000 in Stamp Duty, thankful that they had savings put aside.
However, he continued to believe that they should not have paid the surcharge and involved the Money section of the Sunday Times.
After two months of investigations, the Sunday Times established that Poole was right – there was no liability, because of a transitional rule.
If a buy-to-let owner sells their first main home before November 25, 2015 – when the surcharge came in – and completes on the purchase of a new main residence before November 26 this year, there is no 3% extra to pay.
HMRC has now accepted this is the case and the Pooles are due an exemption.
Commenting on the case to the Sunday Times, property buyer Henry Pryor said: “I’m sure there are people who have miscalculated their tax and not moved as a result of the mistake, as well as people who have paid too much tax on their purchase.”