The Stamp Duty Mistake Costing Buyers Thousands - Lancashire Post

Read this article on The Lancashire Post.

Experts warn even flats, houses and conversions with small business elements could qualify for big savings

Think you paid the right Stamp Duty when you bought your home? Think again.

According to property tax specialists SCA Tax, thousands of residential buyers have unknowingly overpaid – and the firm’s audit of over 7,000 property transactions shows that 1 in 9 people (11%) paid too much, missing out on reliefs worth an average of £13,000.

Stamp Duty Land Tax (SDLT) is the tax you pay when buying a property in England or Northern Ireland. The rates changed in April 2025, and most homeowners now pay 0% on the first £125,000, 2% on the next £125,000, and 5% on the portion from £250,001 to £925,000. So, a £295,000 home would typically cost £4,750 in SDLT.

“People assume that if they’re buying a home, they must be paying residential rates,” says Sean Swimby, Director and Founder of SCA Tax. “But even if there’s a small commercial element – like a rented-out shopfront, a salon, or a separate office – the whole property could qualify for much lower non-residential rates.”

And here’s the surprising part: you don’t even need to own the commercial part. If the property title includes a ground-floor café or office – even if it’s rented to someone else – it could still qualify for tax relief.

SCA recently helped the buyers of a block of flats in Manchester, part of an aparthotel-style building, recover a significant SDLT refund after the property was wrongly taxed as fully residential.

“It doesn’t need to be a live/work unit or all connected,” adds Sean. “As long as part of the property is non-residential, you could qualify – and the savings can be huge.

“But it’s not surprising that so many people are missing out. The rules around reliefs for Stamp Duty are incredibly complicated — even for professionals in the industry,” Sean continues. “And HMRC’s own online calculator just isn’t up to the job. It only works properly for standard house purchases — anything more complex, and it gives the wrong result.

“We regularly see properties with features like workshops, retail units, or even just a home office wrongly taxed as fully residential,” he adds. “That can mean thousands of pounds in unnecessary tax — and most people never realise they’ve overpaid.”

The issue is compounded by the fact that most conveyancers don’t provide tax advice, and few buyers know to question what they’re told. But the good news is that you can still claim a refund for up to four years after the purchase. In one recent case, a homeowner reclaimed £8,500 after their mixed-use property had been misclassified.

Further analysis of the data captured by SCA Tax revealed that 69% of overpayment cases related to probate purchases, 20% involved mixed-use properties, and 6% were linked to the 3% second home surcharge. The average refund across all cases was £12,909.

“While the stakes are high for residential buyers, business buyers, developers and investors could also benefit,” says Sean. “We often see even larger overpayments in commercial transactions – especially where the seller’s circumstances trigger valuable but overlooked reliefs.”

That includes probate purchases (such as buying from an estate), broken property chains (where a developer or company steps in), and new build deals where the buyer enables a developer to complete a sale. In some cases, SDLT can be significantly reduced – or even wiped out entirely.

However, Swimby cautions that the rules are complex and depend heavily on the transaction details, so professional advice is advised.

“In an ideal world, HMRC urgently updates its SDLT calculator to reflect the real-world complexity of property purchases, the government simplifies the rules around reliefs and builds in a safety net to protect business and residential buyers alike, and conveyancers do more to signpost clients towards specialist property tax advisors,” he added.

“Meanwhile, however, if you’ve bought property in the last four years — and it wasn’t a simple house purchase — there’s a strong chance you’ve overpaid, and it’s worth speaking to an expert about what can be done to put it right.”

By using SCA Tax’s service, the stamp duty calculation is backed by the firm’s professional indemnity insurance, offering an additional layer of protection and peace of mind for buyers, solicitors, and conveyancers alike.

The move is designed to support professionals and property purchasers in navigating the often complex SDLT rules, particularly where multiple dwellings relief, mixed-use status, or non-standard transactions may apply.

SCA Tax offers Stamp Duty Rate Certificates to help reduce the risk of incorrect Stamp Duty Land Tax (SDLT) assessments during property transactions.

The certificates provide formal assurance that the SDLT has been correctly calculated by a specialist tax adviser, rather than relying solely on the assessment of a solicitor or conveyancer, who may not have the same level of tax expertise.