Now is not the time for property investors to be making costly mistakes when it comes to stamp duty returns, according to a tax expert.
David Hannah, founder and principal consultant of Cornerstone Tax, says errors made when assessing stamp duty costs are harming the property market.
He says that purchasers who do not consult a specialist tax adviser could end up overpaying stamp duty by thousands of pounds.
Hannah cites a recent example in which a property developer based in Birmingham purchased a large property for £1,415,000.
When the deal was struck, the land benefitted from planning permission to make structural alterations, with the purchaser aiming to construct nine residential dwellings with office space on lower floors.
Cornerstone then evaluated the portfolio and determined that the site had been misclassified at the time of purchase, with Multiple Dwellings Relief available to the buyer.
A claim to amend the stamp duty return was then submitted to HMRC and within a month, a refund for £34,590.93 was issued.
“Simple mistakes like these have a huge impact on the industry and the wider economy,” Hannah suggests.
“At a time when we need to be looking at the rebuilding of industries currently crippled by the worldwide health crisis, it’s more vital than ever that matters like these are handled right first time, every time.”
He adds that confidence in the market is extremely important following a significant drop-off in transaction levels during the height of lockdown.
“Knowing that the SDLT you are going to pay on your property is accurate could be the difference between buying a house or not and we should be doing all we can to encourage the market back onto its feet,” concludes Hannah.
This post has originally been featured in Property Investor Today.