The 3-year rule for stamp duty refunds
If you paid the 5% additional-property surcharge because you bought your new main residence before selling the old one, you can reclaim the surcharge, provided you sell the previous home within 36 months of completion of the new one. This is the SDLT 3-year rule.
Last reviewed 16 May 2026.
How the 3-year rule works
When you buy a new home and still own your existing main residence on the day of completion, the additional-property surcharge applies, even though you fully intend to sell the old home. The 3-year rule is the safety net: provided you sell that previous home within 36 months of completing the new one, you can reclaim the surcharge in full.
The clock starts on completion of the new home, not on exchange or any earlier date. It ends when contracts complete on the sale of the previous home.
Worked example
A couple buys a new family home for £600,000 on 1 May 2026. They still own their existing home, which they intend to sell. They pay £50,000 SDLT (£20,000 standard plus £30,000 surcharge).
Their previous home sells on 1 August 2026, three months later, well within 36 months. They apply for a refund of £30,000 from HMRC. The refund lands in their bank account about two weeks later.
Conditions to meet
- the surcharge was paid on the new home
- the new home is your only or main residence
- the previous main residence is sold within 36 months of completion of the new home
- the application is made within 12 months of the sale of the previous home (or 12 months from filing the SDLT1, whichever is later)
The 12-month application deadline
This is the deadline that catches people out. The 36-month window for selling is generous, but once the old home sells, the application clock starts. You have 12 months from the day the previous home completed to file the refund application. Miss it and the refund is lost.
There is no "reasonable excuse" extension and no discretion. Calendar the application deadline on the day the old home completes.
Common reasons the 3-year rule fails
The previous home was not your main residence
The rule only applies where the previous home was your main residence at some point in the three years before the new purchase. If you let it out the whole time, or owned it but lived elsewhere, it does not count as a main residence for the refund.
Spousal property ownership
Married couples and civil partners are treated as one unit. If your spouse retained an interest in another property after the sale of your "main residence", that other property may block the refund.
The new home is not your main residence
If you bought the new home but did not move in (because, say, it is being renovated and you are renting elsewhere), HMRC may reject the refund on the basis that the new property is not your only or main residence.
What about overseas previous main residences?
The rule applies to a previous main residence anywhere in the world, not just in the UK. A buyer relocating to the UK who paid the surcharge because they still owned a home abroad can reclaim it on selling that overseas home, subject to the same 36-month window.
Special case: the COVID extension
The 36-month window was temporarily extended during the COVID-19 emergency for a narrow band of transactions that became impossible to complete because of the pandemic. This extension does not apply to current purchases, the standard 36-month window is in force.