HMRC has refunded more than £160m to home owners who have been charged the additional Stamp Duty Land Tax rate but have since gone on to sell their former main property.

Figures from insurer Royal London, based on analysis of HMRC data, show that £166m has been refunded since the introduction of the controversial surcharge in April 2016.

Someone purchasing an average priced property at £320,168 in the south-east could find themselves having to pay £15,613 in higher rate Stamp Duty when they were expecting a Stamp Duty bill of £6,008, according to the research.

Similarly, someone purchasing a property in north-west England for an average of £130,000 could find themselves facing a higher rate of around £4,000 when they were only expecting to pay around £100.

Buyers are able to apply for a refund of the tax if they dispose of their former main residence within 36 months of a purchase, but Royal London says that rather than charge people thousands of pounds and then expect them to claim a refund when their other house eventually sells, the extra charge should only be payable if people are genuinely multiple-property owners.

The HMRC figures show £80m was repaid in 2016/2017 and a further £105m has been refunded so far this year.

Helen Morrissey, personal finance specialist at Royal London, said: “We need a more common sense approach.

“It would be far better for the higher rate of Stamp Duty payment to fall due on the first anniversary of the completion of the purchase. By this point, any delays in the sale of a home could be resolved, meaning home owners won’t have the stress of finding the extra money. There would also be a massive decrease in the number of refunds HMRC would need to pay out.”

It comes after a Surrey agent warned the Treasury shouldn’t under-estimate the level of refunds.

David Cantell, of Cantell & Co in Richmond, Surrey, says that his firm has agreed 32 sales so far this year. Ten of these purchasers have paid the additional 3% surcharge, generating an extra £300,000 in Stamp Duty between them.

However, all ten will be selling their former homes within three years of their purchases, so will need to be refunded that 3% surcharge.

Scale of potential Stamp Duty refunds might be bigger than expected, agent warns Treasury