If you’ve recently bought a second property in England or Northern Ireland, chances are you’ve paid the higher rate of Stamp Duty Land Tax (SDLT) – now a 5% surcharge – on top of the standard rate. While this additional charge is unavoidable for many, not everyone realises they might be eligible to reclaim it under specific circumstances. Understanding when and how you can make a 5% SDLT surcharge refund claim is essential to avoid missing out on thousands of pounds.
This article provides a clear and up-to-date explanation of the refund rules, recent changes, and critical deadlines involved.
What Is the SDLT Surcharge?
The SDLT surcharge is an additional percentage charged on top of the normal SDLT rate when you purchase an “additional” residential property – such as a buy-to-let or holiday home. Introduced in April 2016 at 3%, the surcharge rose to 5% in October 2024, following government measures aimed at cooling the housing market and helping first-time buyers.
So, if you bought a second home or investment property for £300,000 after 31 October 2024, the extra 5% SDLT would mean an additional £15,000 in tax – on top of the regular SDLT due.
Who Can Claim a Refund?
You’re entitled to a 5% SDLT surcharge refund claim if:
- You bought a new main residence but had not yet sold your previous one at the time of purchase.
- You later sold your previous main home within the qualifying time period.
- The original purchase attracted the higher SDLT surcharge because you briefly owned two properties.
The idea is simple: if your intention was always to replace your main home and you’ve now completed that sale, HMRC allows you to reclaim the surcharge you paid unnecessarily.
Updated Deadline Rules
Time is of the essence. To claim a refund, you must apply by the later of:
- 12 months from the date of selling your previous main residence, or
- 12 months from the filing date of the SDLT return on your new property.
This means if you bought your new property and filed the SDLT return on 1 April 2025, and then sold your old home on 1 September 2025, you’d have until 1 September 2026 to submit your refund application.
These rules ensure that you have a reasonable window to sell your former home and reclaim the surcharge – but the deadline is strict. Missing it could mean losing your refund entirely.
Exceptional Circumstances
HMRC understands that some situations are beyond your control. If you were prevented from selling your old home within the standard three-year period due to reasons like a public authority’s restriction or a global event (e.g. the COVID-19 pandemic), you may still qualify for a refund.
However, you’ll need to provide evidence that:
- The delay was due to exceptional circumstances, and
- You sold the property as soon as it was reasonable to do so.
In these cases, HMRC exercises discretion, so the strength of your explanation and documentation is key.
How to Apply for the Refund
You can apply for your refund online through HMRC’s portal or by submitting a paper form. You’ll need:
- SDLT transaction reference number (from your return)
- Details of both the new and old properties
- Dates of purchase and sale
- Amount of tax paid and amount of refund claimed
- Your bank details for payment
While the application process is relatively straightforward, mistakes or missing details can delay your refund – or result in a denial.
Many property investors choose to consult tax advisers or conveyancers to help with the claim, especially when significant sums are involved.
