If you paid the higher rates of Stamp Duty Land Tax because you bought a new main home before selling the old one, you can reclaim the extra 5% once the old home is sold, provided the sale completes within three years of buying the new home. HMRC must receive the claim within 12 months of the later of the sale and the filing date of the return for the new home, and the claim is made online or on form SDLT16.

Why were the higher rates charged in the first place?

The higher rates for additional dwellings look at what the buyer owns at the end of the completion day. Someone who completes on a new home while still owning the old one owns two dwellings at that moment, so the purchase is a higher rates transaction even though they plan to sell. Schedule 4ZA to the Finance Act 2003 then lets the position be corrected. Under paragraph 3(7), the new home counts as a replacement for the buyer’s only or main residence, and so stops being a higher rates transaction, if:

  • on the effective date of the purchase, the buyer intended the new home to be their only or main residence;
  • the buyer, or their spouse or civil partner, sells a major interest in the old home within the permitted period, normally the three years after the purchase;
  • immediately after the sale, neither the buyer nor their spouse or civil partner has any major interest left in the old home; and
  • the old home was the buyer’s only or main residence at some time in the three years before the new purchase.

What is the time limit for claiming?

There are two clocks. The sale must complete within three years after the effective date of the new purchase. Then the claim must reach HMRC within 12 months of whichever is later of:

  • the date of sale of the previous main residence; and
  • the filing date of the SDLT return for the new home, which is 14 days after its effective date.

The legal basis is paragraph 8(3) of Schedule 4ZA, which allows the return for the new home to be amended within that period. For sales on or before 28 October 2018 the old rule gave only three months from the sale, which explains why some older guidance quotes a shorter window.

Illustration only. Sam completes on a new home for £450,000 on 2 March 2026 while still owning the old one. He pays £35,000 instead of the standard £12,500, a difference of £22,500. The old home sells on 15 January 2027. Sam has until 12 months after 15 January 2027 to claim the £22,500. Had the sale fallen through and completed only in April 2029, more than three years after the purchase, no refund would be due unless exceptional circumstances applied.

What if the old home sells before the return is due?

HMRC’s manual at SDLTM09805 accepts that where the old home is sold after completion of the new purchase but before the deadline for the return on that purchase, the return can be completed as if the purchase were not a higher rates transaction. In practice this means a sale completing within the 14 day filing window avoids paying the surcharge at all, rather than paying it and waiting for a refund.

What if the sale takes longer than three years?

For new homes bought on or after 1 January 2017, HMRC can extend the three year limit if exceptional circumstances that could not reasonably have been foreseen prevented the sale, and the buyer sold as soon as they reasonably could once the obstacle ended. HMRC’s examples are government restrictions on selling and action by a public authority preventing the sale. SDLTM09807 says exceptional circumstances are expected to be very rare and to affect large groups of people, and lists what does not qualify: a buyer withdrawing, a chain collapsing, shortage of funds, or holding off in a falling market.

The manual’s own examples are instructive. A couple whose flat needed cladding remediation and an EWS1 certificate before any lender would lend on it were allowed a refund after selling once the work was done. A buyer who bought a flat knowing it needed that work was refused, because the delay was foreseeable. There is no clearance in advance. The old home must be sold first, and the claim must explain what the circumstances were, how they prevented a sale, why they were not foreseeable, and show the sale followed promptly. HMRC’s decision is discretionary and there is no right of appeal against it.

How do you apply?

HMRC’s guidance offers an online form, usable by the main buyer or an agent acting for the main buyer, and a paper form SDLT16 to fill in online, print and post. The form cannot be saved part way through, so gather the following first:

  • your details, and the main buyer’s details if different;
  • the new property’s address, effective date and SDLT unique transaction reference number;
  • the old home’s address, date of sale and the name of its buyer;
  • the tax paid on the new property and the amount being reclaimed;
  • bank details of the person to be repaid.

If the refund is to be paid to an agent, a covering letter and signed authority from the purchaser must be attached as a JPEG or PDF of up to 5MB. Exceptional circumstances claims go by letter to BT Stamp Duty Land Tax, HM Revenue and Customs, BX9 1HD.

HMRC usually pays within 15 working days. It pays without checking eligibility first, but that is not agreement that the refund is due. HMRC has up to nine months to make a compliance check on the amended return or claim, and a refund paid in error must be repaid with interest and possibly a penalty. Responsibility stays with the buyer even where an agent submitted the claim.

Which sales do not produce a refund?

The refund depends on selling a previous main residence that the buyer, or their spouse or civil partner, owned. HMRC’s examples at SDLTM09810 show where claims fail:

  • Selling a buy to let. An investor who keeps their old home to let and sells a rental flat instead gets no refund, because no main residence was replaced.
  • Merging with the house next door. Buying the neighbouring house and knocking through does not count, because the old home is still owned in altered form.
  • Unmarried partners. If an unmarried couple buy together and only one of them owned the old home, its sale counts for that partner only. If the other partner owns a let property, the purchase stays a higher rates transaction.
  • Keeping a share. Since 22 November 2017, selling only part of the old home, or transferring it to a spouse, leaves the condition unmet because a major interest is retained.
  • Double counting. One sale can only be used once. A sale that turns an earlier purchase into a replacement cannot also protect a later purchase (paragraph 8(2)).

Joint owners of the old home can each rely on their own disposal, and a disposal does not have to be a sale: a gift or a transfer under a divorce court order counts.

How does this interact with the non resident surcharge?

A buyer who paid both the higher rates and the 2% non resident surcharge makes separate claims. The non resident refund has its own two year limit and form, and HMRC’s guidance for that form asks for the tax due after any refund of the higher rates already claimed. Other overpayments, such as a missed relief or non residential rates that should have applied, are reclaimed by amending the return within 12 months of the filing date or, later, by an overpayment relief claim made no more than four years after the effective date.

What mistakes delay or defeat claims?

  • Missing the 12 month window because nobody takes responsibility for the claim once the sale completes.
  • Leaving a spouse’s name on the old title after the sale.
  • Letting the old home after moving, then selling after the three year limit.
  • Assuming any later sale counts, when only a former main residence does.

For how the original tax was worked out, see our SDLT overview.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.