The overlap problem in a chain
Completing on a new home before the old one has sold is common when a chain does not line up. This article summarises two GOV.UK pages: “Stamp Duty Land Tax: residential property rates” and HMRC’s guidance “Higher rates of Stamp Duty Land Tax”, published on 16 March 2016 and last updated on 1 April 2025. Both concern Stamp Duty Land Tax (SDLT), which applies to residential purchases in England and Northern Ireland. Scotland and Wales have their own taxes on property purchases, and this site’s articles on Stamp Duty Land Tax deadlines and on land taxes in Scotland and Wales cover related points. The figures below are those shown on GOV.UK in September 2026 and can change, so the current pages and the SDLT calculator should be checked before completion. This article is general information, not tax advice.
When the higher rates apply (England and Northern Ireland)
HMRC says the higher rates are payable when a buyer purchases a residential property, or part of one, for £40,000 or more, if all of the following apply:
- it will not be the only residential property worth £40,000 or more that the buyer owns or part owns anywhere in the world;
- the buyer has not sold or given away their previous main home; and
- no one else has a lease on the property with more than 21 years left to run.
The test looks at ownership at the end of the day of the new purchase, and it includes the current home if the buyer still owns it. The rules apply to a married or civil-partnered buyer and their spouse as if they were buying together, and to each person and spouse in a joint purchase, so one person’s ownership can trigger the higher rates for the whole transaction. Property owned on behalf of children under 18 counts, and so do interests as a beneficiary of a trust.
The rates in numbers (England and Northern Ireland)
GOV.UK’s rates for a single property show zero up to £125,000, 2 per cent on the next £125,000, 5 per cent on the portion from £250,001 to £925,000, 10 per cent from £925,001 to £1.5 million and 12 per cent above that. The page says a buyer usually pays 5 per cent on top of those rates when owning another property. HMRC’s table of higher rates from 1 April 2025 shows 5 per cent up to £125,000, 7 per cent on the next £125,000, 10 per cent from £250,001 to £925,000, 15 per cent from £925,001 to £1.5 million and 17 per cent above that.
HMRC’s worked example is a £300,000 additional purchase, on which the SDLT is £20,000. Under the standard rates the same £300,000 would produce £5,000, so the difference is £15,000, which is 5 per cent of the price. First-time buyers, non-UK residents and companies have separate rules that are outside this article.
Replacing a main residence (England and Northern Ireland)
GOV.UK says a buyer will not pay the extra 5 per cent if the new property replaces their main residence and the previous main residence is sold within 36 months of completing the new purchase. The rates page adds that a buyer who has not sold the main residence on the day of completion owns two properties and will have to pay the higher rates, then check eligibility for a refund. The practical effect for a chain is a payment at completion that is refunded if the sale later completes in time.
The refund (England and Northern Ireland)
HMRC says that a buyer who sells or gives away the previous main home within three years of buying the new one can apply for a refund of the higher-rate part of the SDLT bill. No refund is available if the buyer or their spouse still owns any part of the previous home, or if the higher rates still apply for another reason.
For a previous main residence sold on or after 29 October 2018, the claim must be made within 12 months of whichever is later: the sale of the previous main residence, or the filing date of the SDLT return for the new residence. HMRC also describes a route where a new home was bought on or after 1 January 2017 and the previous home could not be sold within three years because of exceptional circumstances, such as government-imposed restrictions or action by a public authority preventing the sale. Once the reason has ended, the previous home must be sold before a refund can be claimed.
Timing and the return (England and Northern Ireland)
HMRC says the SDLT return must reach HMRC within 14 days of the effective date of the purchase, and the bill can be paid as soon as the return has been sent. Exchange and completion mechanics are explained in this site’s article on exchange versus completion, and chain breaks and gazumping shows how a collapsed sale affects a removal booking.
Common questions
Is the extra 5 per cent payable on the whole price? The rates page says a buyer usually pays 5 per cent on top of the standard rates, and HMRC says the higher rates apply to everything given for the purchase.
Does the rule apply in Scotland or Wales? The GOV.UK pages concern England and Northern Ireland, and the guidance points readers to separate information for Scottish and Welsh transactions.
What if the old home never sells within three years? HMRC describes a refund route only where exceptional circumstances prevented the sale.
The bottom line
In England and Northern Ireland, completing a purchase while still owning a previous main home usually triggers the higher SDLT rates, which HMRC’s example puts at £15,000 more on a £300,000 purchase. If the previous home is sold within 36 months, a refund of the higher-rate element can be claimed within 12 months of the later of the sale and the return filing date, provided no other reason for the higher rates applies.