Why buying before you sell costs more Stamp Duty
If you still own your current home when you complete on a new one, you own two homes on the day of purchase, so the higher rates for additional properties apply. In England and Northern Ireland that means 5 percentage points on top of the normal Stamp Duty Land Tax rates. In Scotland the Additional Dwelling Supplement adds 8% of the whole price to Land and Buildings Transaction Tax, and Wales charges its higher residential rates of Land Transaction Tax.
The extra is not lost if the new home replaces your main residence. Once your previous main home is sold within the time limit, you can reclaim the difference between the higher rates and the normal home-mover rates. Many buyers use a short bridging loan to pay the full tax on completion and repay it from the sale of the old home.
Refund time limits in England, Scotland and Wales
England and Northern Ireland: sell or give away your previous main home within 3 years of buying the new one, then claim the refund from HMRC within 12 months of the sale or of the filing date of the return for the new home, whichever is later.
Scotland: dispose of your previous main residence within 36 months of buying the new one for purchases from 1 April 2024; the limit was 18 months before then. Claim by amending your LBTT return within 12 months or by making a repayment claim within 5 years of the return's due date.
Wales: sell your previous main home within 3 years of buying the new one, then claim from the Welsh Revenue Authority, normally within 4 years of the day after the filing date of the return. Longer periods can apply in narrow cases, such as fire-safety defects.
Worked example: a £450,000 home in England
At home-mover rates, Stamp Duty on £450,000 is £12,500: nothing on the first £125,000, 2% of the next £125,000 and 5% of the remaining £200,000. Because you still own your old home, the higher rates add 5% of £450,000, which is £22,500, so £35,000 is due on completion.
A bridging loan of £35,000 at 0.85% a month for 6 months, rolled up and compounded monthly, costs £1,823.36 in interest. With a 2% arrangement fee of £700 and £1,000 of valuation and legal costs, bridging the tax costs £3,523.36, and £36,823.36 is repaid from the sale. Once your old home sells, you can reclaim the £22,500, so the tax you finally pay is £12,500.
The same price in Scotland and Wales
In Scotland, LBTT on £450,000 is £18,350 at the normal rates and the 8% Additional Dwelling Supplement adds £36,000, so £54,350 is due and £36,000 is reclaimable if you sell in time. In Wales, Land Transaction Tax is £14,250 at the main rates and £36,200 at the higher rates, so £21,950 is reclaimable.
Risks to check before you bridge the tax
The refund depends on selling your previous main home within the time limit. If the sale falls through or takes longer, the bridging loan runs on and the extra tax may not come back. Allow for a slower sale when you choose the term, and check the bridging lender's minimum loan size and fees, which can be high on a small loan.
A bridging loan secured on your home is usually a regulated mortgage contract, so you should receive regulated advice. The rates here are the ones in force now; check the rules that applied on your completion date and the latest guidance from HMRC, Revenue Scotland or the Welsh Revenue Authority.
For the tax on any purchase, including first-time buyer relief, use the UK Stamp Duty calculator .
If you also need to bridge part of the purchase price, use the UK bridging finance calculator .
Inputs for the bridging loan for Stamp Duty calculator
Where is the new home?
England and Northern Ireland use Stamp Duty Land Tax, Scotland uses LBTT with the Additional Dwelling Supplement, and Wales uses Land Transaction Tax.
Price of the new home
The price you are paying for the home you are buying, not your old home.
Are you a UK resident?
In England and Northern Ireland, buyers who are not UK resident pay a further 2% surcharge, which is not refunded when you sell.
Bridging interest rate
The monthly rate in your bridging quote, not the APR.
Months until your old home sells
How long you expect to keep the loan. The sale repays it and triggers the refund.
How interest is paid
Rolled-up interest is added to the loan and repaid from the sale; paid monthly means you cover it as you go.
Arrangement fee
The lender's fee as a percentage of the loan, often 1% to 2%, paid when the loan starts.
Other bridging costs
Valuation, legal and broker fees for the bridging loan.
CALCULATOR QUESTIONS
UK bridging loan for Stamp Duty calculator questions
Do I pay the higher rate of Stamp Duty if I buy before selling?
Usually yes, because you own two homes on the day you complete. If the new home replaces your main residence, you can reclaim the extra once the old home sells within the time limit.
How long do I have to sell my old home to get the refund?
3 years in England, Northern Ireland and Wales. In Scotland, 36 months for purchases from 1 April 2024, and 18 months before then.
How do I claim the Stamp Duty refund?
In England and Northern Ireland apply to HMRC within 12 months of the sale or the filing date, whichever is later. In Scotland claim from Revenue Scotland, and in Wales from the Welsh Revenue Authority.
Can a bridging loan pay my Stamp Duty?
Yes. Lenders can bridge the tax, or the tax plus part of the price, and the loan is repaid when your old home sells. Check the minimum loan size and fees.
Is the non-resident surcharge refunded?
No. The 2% surcharge for buyers who are not UK resident is separate from the additional-property higher rates and is not refunded when you sell.