Buying a new home before selling your old one is more common than people realise — especially in fast-moving property markets. What many buyers don’t realise, however, is that this sequence can entitle them to a stamp duty refund worth tens of thousands of pounds.
The rules sound simple on paper, but in practice, confusion around timelines, ownership definitions, and HMRC conditions means many buyers either fail to claim a stamp duty refund or assume they’re not eligible when they actually are.
This article breaks down how the process really works, where buyers go wrong, and how to make sure you don’t leave money with HMRC unnecessarily.
Why You Pay More Stamp Duty When You Buy Before You Sell
If you purchase a new residential property while still owning another one, HMRC treats this as a “higher rates” transaction. This triggers the 3% additional Stamp Duty Land Tax (SDLT) surcharge on top of standard rates.
In most cases, buyers pay this higher rate upfront — even if the old home is only being held temporarily.
This is where the stamp duty refund comes in.
When Are You Actually Entitled to a Stamp Duty Refund?
You may be eligible for a stamp duty refund if all of the following apply:
- You bought a new main residence
- You paid the higher SDLT rates because you still owned your previous home
- You later sold your old main residence
- The sale completed within 36 months of buying the new property
If those conditions are met, HMRC allows you to reclaim the 3% surcharge through a stamp duty refund claim.
This applies whether:
- The old property was sold after the new purchase
- The old property was previously your main residence
- You temporarily owned two homes due to a chain delay
The 36-Month Rule: Where Most Buyers Slip Up
The most misunderstood part of the stamp duty refund process is the time limit.
You have:
- 12 months from the sale of your old home, or
- 12 months from the SDLT filing date (whichever is later)
to submit your refund claim.
Miss this window, and HMRC can legally refuse the stamp duty refund, even if you were fully entitled to it.
This is one of the most common — and costly — mistakes buyers make.
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What Counts as a “Main Residence”?
Another major source of rejected stamp duty refund claims is misunderstanding what HMRC considers a “main residence”.
HMRC looks at factors such as:
- Where you lived most of the time
- Where you were registered to vote
- Utility bills and council tax records
- Where your family lived
Simply owning a property doesn’t make it a main residence — but failing to evidence this properly can derail a stamp duty refund claim.
Joint Buyers and Stamp Duty Refunds
If you bought jointly, the rules become stricter.
If any buyer still owns another residential property and does not dispose of their previous main residence within the required timeframe, the stamp duty refund may be partially or fully unavailable.
This catches out:
- Couples with uneven property histories
- Buyers where one party previously owned a buy-to-let
- Buyers who inherited property interests
Understanding this before claiming is crucial.
How to Claim a Stamp Duty Refund (and Why Many Get It Wrong)
Claiming a stamp duty refund isn’t automatic. You must actively apply to HMRC and provide supporting details, including:
- SDLT return reference number
- Completion dates for both properties
- Confirmation that the sold property was your previous main residence
Many claims are delayed or rejected because:
- Incorrect dates are entered
- Evidence is incomplete
- The buyer misunderstands eligibility
This is why most buyers benefit from following a step-by-step technical guide rather than relying on assumptions.
Why Professional Guidance Matters
A stamp duty refund can easily run into five figures — yet it’s often treated as an afterthought once the property transaction is complete.
In reality, the rules around replacement of main residence, ownership structures, and deadlines are technical and unforgiving.
That’s why specialist guidance — such as this complete stamp duty refund guide from UK Property Accountants — is invaluable for ensuring:
- You’re genuinely eligible
- You don’t miss HMRC deadlines
- Your claim is correctly submitted the first time
Final Thought
If you bought a new home before selling your old one, don’t assume the higher SDLT bill is final. A stamp duty refund may already be sitting there — but only if you understand the rules and act in time.
The difference between claiming successfully and missing out often comes down to clarity, timing, and getting the details right.
