If you’ve recently bought a property and were hit with a higher rate of stamp duty, you might be wondering if you’re entitled to some of that money back. With the rules around stamp duty being as complex as they are, many buyers end up paying more than they should—especially when it comes to additional property purchases. In certain cases, it’s possible to claim a 5% stamp duty surcharge refund.
This article breaks down when the higher rate applies, who might be able to get a refund, and how the process works.
When Does the 5% Surcharge Apply?
In the UK, if you buy an additional residential property—say a second home or a buy-to-let—you’re usually charged a 3% surcharge on top of the standard Stamp Duty Land Tax (SDLT). But in some situations, this can jump to 5%. This higher rate can apply to overseas buyers, companies, or anyone purchasing a property worth enough to push them into the 5% band, depending on how HMRC calculates it.
It’s not always clear-cut, and because stamp duty is based on your situation at the time of completion, people often end up paying the surcharge “just in case”—especially if they haven’t sold their previous main home yet.
There are a few key situations where you might be able to claim money back:
- You Sold Your Previous Main Home Shortly After Buying the New One: If you bought your new home before selling your old one, you probably paid the surcharge. But if you sold your previous main residence within 36 months, you could be eligible for a refund.
- You Were Misclassified: If you were treated as a non-resident for stamp duty purposes but later met the UK residency requirements, you may be able to claim a refund of the extra charge.
- An Error Was Made: It’s not unheard of for buyers—or their advisers—to miscalculate what stamp duty should be paid. If the wrong rate was applied due to a misunderstanding or incorrect classification, there may be grounds for a refund.
How to Claim
If you think you’ve overpaid, claiming a 5% stamp duty surcharge refund isn’t too complicated—but you do need to act within the time limits. Generally, you have 12 months from either the sale of your previous main residence or the filing deadline of your original stamp duty return (whichever is later) to make the claim.
You can apply through HMRC’s online service or by post. You’ll need:
- The stamp duty transaction reference number
- Details of the property you bought and the one you sold
- The dates of completion for both
- Proof of ownership and sale
In most straightforward cases, HMRC will process the refund within a few weeks. More complex cases—like those involving overseas buyers or companies—can take a bit longer.
Conclusion
Stamp duty rules can be tricky, and it’s easy to assume that once it’s paid, there’s no going back. But in reality, a surprising number of people qualify for refunds and never realise it. If you’ve recently bought a property and suspect you paid more than necessary, it’s worth checking your situation.
Getting a refund could mean thousands of pounds back in your pocket—money you could put towards renovations, investments, or just a bit of peace of mind.
