Key facts
- The 5% surcharge is paid upfront if you own two homes on completion day.
- You can reclaim the surcharge if you sell your previous main residence within 36 months.
- The refund claim must be made within 12 months of selling the old home.
- The refund covers the full 5% surcharge (or 3% for pre-31 October 2024 transactions).
- HMRC typically processes refunds within 15–20 working days of a valid claim.
Why the Surcharge Applies When Replacing a Home
The higher-rate surcharge (5% from 31 October 2024) applies when you own two or more residential properties at the end of the day of your purchase. In a straightforward replacement — selling one home and buying another on the same day — there is no surcharge because you never own two properties simultaneously.[1]
However, many buyers purchase their new home before selling the old one, creating a period of dual ownership. In this situation, the surcharge applies on the new purchase because at completion you own two residential properties.
The Refund Process
The legislation provides for a refund if you sell your previous main residence within 36 months of buying the replacement:[2]
- Pay the surcharge upfront on the new purchase (your solicitor will include it in the SDLT calculation)
- Sell your previous main residence within 36 months of the new purchase’s effective date
- Claim a refund from HMRC within 12 months of the sale of the old property (or 12 months of the filing date of the original SDLT return, whichever is later)
Conditions for the Refund
To qualify for a refund, you must demonstrate that:[3]
- The property you sold was your only or main residence at some point during ownership
- You intend the new property to be your only or main residence
- The previous property was disposed of (sold, not simply transferred between spouses)
- The disposal occurred within 36 months of the effective date of the new purchase
Exceptional circumstances: HMRC has discretion to extend the 36-month window in exceptional circumstances — for example, where the sale fell through due to the buyer’s actions and you had to find a new buyer. Claims on this basis should be supported by evidence of the circumstances.
How to Claim the Refund
You can claim the refund in two ways:[2]
Option 1: Amend the Original SDLT Return
If you are within the 12-month amendment window for the original SDLT return, you can amend it to remove the higher rates. This is the simplest method.
Option 2: Apply Directly to HMRC
If the 12-month amendment window for the original return has passed, you can write to HMRC or use their online request form. You will need:
- The SDLT unique transaction reference number (UTRN) from the original return
- Details of the property purchased (address, effective date, purchase price)
- Details of the property sold (address, sale date, sale price)
- Confirmation that the sold property was your main residence
- Your bank details for the refund
Worked Example
James buys a new home for £350,000 on 1 June 2025. He still owns his old home (which he has lived in for 10 years). His SDLT is calculated at the higher rates:
| Slice | Amount | Higher Rate | SDLT |
|---|---|---|---|
| £0 – £125,000 | £125,000 | 5% | £6,250 |
| £125,001 – £250,000 | £125,000 | 7% | £8,750 |
| £250,001 – £350,000 | £100,000 | 10% | £10,000 |
| Total SDLT (higher rates) | £25,000 | ||
| SDLT at standard rates | £7,500 | ||
| Surcharge element | £17,500 | ||
James sells his old home on 15 September 2025. He claims a refund of £17,500 from HMRC, which is processed within 20 working days.
Tip: Set a reminder to claim the refund as soon as the sale of your old home completes. You have 12 months from the sale date, but it is easy to forget. The sooner you claim, the sooner you get your money back.
Frequently Asked Questions
How do I reclaim the SDLT surcharge?
You apply to HMRC for a refund using the online form or by writing to them. You must provide details of both the purchase and the sale, plus evidence that the sold property was your main residence. The claim must be made within 12 months of the sale of the old property.
What if I cannot sell my old home within 36 months?
If the old home is not sold within 36 months, you cannot reclaim the surcharge. There are limited exceptions — for example, if the sale was delayed by factors genuinely beyond your control, HMRC may exercise discretion, but this is not guaranteed.
Can I reclaim the surcharge if my old home was rented out?
The key test is whether the property you sold was your only or main residence at any point. If it was previously your main home but you rented it out for a period before selling, you may still be able to reclaim, provided you can demonstrate it was your main residence before the rental period.
Does the 36-month period start from exchange or completion?
The 36 months run from the effective date (usually completion) of the new purchase. The old home must be disposed of (again, usually completion of the sale) within 36 months of that date.
Further Reading
- Higher Rates for Additional Dwellings — full details of the 5% surcharge
- Residential SDLT Rates (2025/26) — current rate tables
- SDLT Returns: How to File — filing and amending returns
- Inherited Property & SDLT — how inherited property interacts with the surcharge
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