The government refunded £127m of Stamp Duty to second-homeowners forced to overpay the Inland Revenue since the second home Surcharge was introduced in April 2016.
HM Revenue and Customs (HMRC) figures showed that 6,800 additional property refunds totalling £80m were paid in 2016-17, with a further £47m repaid in Q2 2017.
The data confirmed HMRC had to give refunds on 10,700 transactions at an average cost of £11,869 each.
Under the replacement main residence rule, people who buy a second property without selling the first must pay higher Stamp Duty upfront but are eligible for a refund if they sell the former home within three years.
Tax advisers have suggested the payments are prohibitive, or could even stop families moving home entirely.
In total the government collected £8.6bn in Stamp Duty in 2016-17, of which £1.7bn arose from the 3% Surcharge.
Landlord tax errors
HMRC has also updated its website with a series of cases studies illustrating the common mistakes landlords make on their tax payments.
In one example, it lists partners moving in together with one renting out a former property with the rent just covering the mortgage – as a result they assumed there is no tax liability. In fact, the only allowable expense is the interest paid on her mortgage repayment.
Other examples include the armed forces overseas renting out property, the tax position after renting out the family home following a move into care or buying a student let.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
