If you live in a house with a granny annexe, this guest post by Cornerstone, could be a valuable read:
Stamp Duty Land Tax has been a big topic in the news over the last year, and again since the budget earlier this month. The Chancellor’s ‘holiday’ on the tax and the subsequent extension have definitely served to increase activity in the property market, with prices rising and many looking to move while the opportunity is there.
For those of us already living in a property and lacking the desire or ability to move, especially if we bought not long before Covid-19 and Lockdown hit, it might feel a little like we missed out. But what if your property had a Stamp Duty surprise all of its own to give you?
It’s becoming increasingly common knowledge that Stamp Duty is often incorrectly assessed on property purchases in the UK – we estimate that as many as one in five buyers end up paying the wrong amount of Stamp Duty on their purchase and in the last twelve months alone we have helped property owners reclaim over £12million in overpaid Stamp Duty from HMRC.
One of the most common causes of Stamp Duty overpayment is when Multiple Dwellings Relief, or MDR is missed on a property. This is available – as the name might suggest – when a property consists of more than one dwelling, the Stamp Duty due is calculated based on the average value of the various dwellings comprising the property. This becomes particularly relevant with regards to properties with annexes, like a house with a Granny annexe bought to accommodate elderly parents or other relatives, or perhaps a family home purchased with an annexe for older teenage children.
Dependent on the particular circumstances of the annexe, including but not limited to the facilities it contains, whether it has its own separate access etc. then it may be classified as a separate dwelling for the purposes of MDR. It is highly unlikely that this would have been spotted by your solicitor for a variety of reasons, not least that the calculator provided by HMRC to work out Stamp Duty on purchases is highly limited and does not take account of various pertinent circumstances – HMRC themselves having publicly admitted that it is intended merely as ‘a guide’.
The only way to be sure therefore, that you have paid the correct Stamp Duty on your property with an annexe is to have it assessed by a Stamp Duty expert. Cornerstone have specialised in Stamp Duty advice for a decade and a half, and in that time we have helped thousands of clients make sure that they pay only what they need to, and recover anything they have overpaid. There’s no upfront cost, no hidden charges, and we will deal with all the paperwork for you, leaving you to sit back and wait for the best brown envelope you’ll ever receive from HMC to hit your doormat.
Please feel free to call us on 01858 894349 or visit our website: www.ctatax.uk.com for a free assessment. Please quote the Garden Room Guide.