Law Society responds to lawyer’s lack of SDLT knowledge

Lawyers lack of SDLT Knowledge

If you have recently bought a property you will be familiar with stamp duty land tax (lawyers call it SDLT). It was likely to have been the largest item of expenditure in your house purchase by far. What many new homes owners don’t realise, or realise too late is that they may have paid too much SDLT. It is common for this over-payment to run into thousands of pounds, sometimes it can even be hundreds of thousands.

The best solution is to be aware and avoid this problem in advance. The second best is knowing who can help you fix the problem.

- Kevin Windo, Managing Director

​Some lawyers don’t understand SDLT

What appears to be happening is that regular property lawyers (solicitors, legal executives and licensed conveyancers) who do residential conveyancing day in and day out don’t always understand some of the technicalities involved.

A common area where property lawyers come unstuck is where the property has an annex (often called a granny annex or granny flat). In these cases, if the purchaser was to work with their lawyer their combined knowledge of the property may have greatly reduced the SDLT cost.

Other SDLT problem areas are

• 3% uplift for purchasing a second property
• first-time buyers SDLT relief
• 3% uplift on SDLT if you own a share in another property
• SDLT payable on renting an expensive flat

Each of these areas can result in homeowner(s) overpaying by thousands of pounds.

Throw the book at them

The problem is becoming so serious that the Law Society is going to publish a book this year just on SDLT.

So why is it going wrong so badly that the Law Society is looking at it? In the case of multiple-dwellings relief it seems that property lawyers are just completing the compulsory SDLT return to the Revenue without making a claim for a reduced rate. When challenged they may say they don’t give tax advice or they are not tax specialists – that maybe true so why are they completing the form and submitting it? Unfortunately for them our view is that they should know enough to know there is a problem, even if they need to pause to find out the answer (or ask a specialist).

What can you do?

In many cases overpaid SDLT can be corrected relatively easily for a fixed time after the property purchase, once the time has elapsed then the only route to recover any money is a negligence claim against the lawyer.

Clearly making a claim against a property professional can be daunting. They may deny liability or claim that the customer partly caused the mistake by signing the papers.

If you think you may have overpaid SDLT call or contact Lincoln Green Solicitors.

Have a chat with us and we’ll help you make your next move.