Buying a new home before selling your old one is extremely common. Chains break down, markets move slowly, and sometimes you need to secure a property before your sale completes. But doing so triggers a significant additional cost: the additional property surcharge on stamp duty.
Since October 2024, this surcharge has been 5% of the entire purchase price, up from the previous 3%. On a £600,000 property, that's an extra £30,000 in stamp duty — on top of the standard rates. The good news? If you sell your old property within 3 years, you can claim every penny of that surcharge back.
What is the additional property surcharge?
The additional property surcharge applies when you buy a residential property and you already own another one. It was introduced in April 2016 at 3% and increased to 5% on 31 October 2024 as part of the Autumn Budget changes.
The surcharge is calculated on the entire purchase price, not just the amount above a threshold. So for a £600,000 property, the surcharge alone is £30,000 (5% x £600,000), added on top of the standard SDLT of £12,500 — bringing the total stamp duty bill to £42,500.
Worked example
Purchase price: £600,000
Standard SDLT: £12,500
5% surcharge: £30,000
Total SDLT paid: £42,500
Potential refund (surcharge): £30,000
When can you claim the surcharge back?
You can claim a refund of the additional property surcharge if all of the following conditions are met:
- You paid the surcharge on a new property because you owned another residential property at the time of purchase
- You sell (or otherwise dispose of) your previous main residence within 3 years of purchasing the new property
- The new property is intended to be your main residence (replacing the one you sold)
The 3-year window runs from the effective date (completion date) of the new purchase, not from when you paid the stamp duty or when you moved in.
How to claim: the SDLT16 form
To claim the refund, you need to submit HMRC's SDLT16 form — the official form for requesting a refund of the additional property surcharge. Here's the process:
The deadline for claiming
You must submit your SDLT16 claim within whichever is later:
Option A
12 months from the sale of your previous main residence
Option B
12 months from the filing date of the SDLT return for the new property
Whichever date is later is your deadline. In practice, if you sell your old property relatively quickly (within a few months), the filing date of the original return will often be the binding deadline. If you sell closer to the 3-year mark, the sale date becomes the relevant deadline.
Don't miss this
The 3-year window to sell your old property and the 12-month window to submit the claim are separate deadlines. You must meet both — sell within 3 years and submit the SDLT16 within 12 months of the sale (or filing date, whichever is later).
How much is the refund worth?
The refund equals the entire additional property surcharge you paid — currently 5% of the purchase price. Here are some examples:
| Purchase price | 5% surcharge paid | Refund amount |
|---|---|---|
| £300,000 | £15,000 | £15,000 |
| £400,000 | £20,000 | £20,000 |
| £500,000 | £25,000 | £25,000 |
| £600,000 | £30,000 | £30,000 |
| £800,000 | £40,000 | £40,000 |
| £1,000,000 | £50,000 | £50,000 |
Based on the 5% surcharge rate (from October 2024). If you purchased between April 2016 and October 2024, the surcharge was 3% and the refund amount will be lower accordingly.
Common scenarios and edge cases
What if my old property hasn't sold yet?
You cannot claim the refund until the sale completes. If you're approaching the 3-year deadline and your old property hasn't sold, you need to complete the sale before the deadline expires. If the sale doesn't complete within 3 years, you lose the right to the refund permanently.
What if I keep both properties?
If you choose to keep your old property (as a rental or second home), the surcharge stands and no refund is available. The refund is specifically for people who were replacing their main residence and temporarily owned two properties during the transition.
What about properties bought before October 2024?
If you bought before 31 October 2024, the surcharge was 3% rather than 5%. The refund mechanism works the same way — you just get back the 3% surcharge rather than 5%. For a £600,000 property, that would be £18,000 rather than £30,000. Still a very significant sum.
Can I also claim for chattels?
Yes. The second home surcharge refund and the chattels overpayment relief are completely separate claims. You could potentially make both claims on the same property — getting back the surcharge and the overpaid SDLT on carpets, curtains, and other chattels.
If you're in this situation, use our refund estimator to check your chattels refund, and follow the SDLT16 process described above for the surcharge refund.
Mistakes to avoid
- Don't assume the refund is automatic. You must actively claim using the SDLT16 form. HMRC will not proactively refund the surcharge even if they know you've sold your old property.
- Don't miss the 12-month claim deadline. Even if you sell your old property within 3 years, you still need to submit the SDLT16 within 12 months of the sale (or the filing date, whichever is later).
- Don't confuse this with chattels refunds. The surcharge refund is a separate process from claiming back overpaid SDLT on chattels. They use different forms and have different eligibility criteria.
- Don't forget about interest. If you paid the surcharge and are entitled to a refund, HMRC will not pay interest on the amount held between payment and refund. The refund is just the surcharge amount — no more, no less.
The bottom line
If you paid the additional property surcharge and have since sold your old main residence (or plan to within 3 years), you are almost certainly entitled to a full refund of the surcharge. At 5%, this can be worth tens of thousands of pounds. The process is straightforward — download the SDLT16 form, complete it, and submit it to HMRC.
Also overpaid on chattels?
You could claim both the surcharge refund and a chattels refund. Check your chattels refund in under two minutes.