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I have three polygon areas showing different land types and I want to create a new layer based on where the three layers overlap each other.

I thought this was a subtraction query but havent been able to achieve this in ArcGIS for Desktop.

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In ArcGIS for Desktop, to do this with an Advanced or Standard license, you just need to use the Intersect (Analysis) tool and input the three layers at once.

If you are using Basic then you will need to use the same tool twice - once to intersect the first two layers, and then again to intersect the result with the third layer.

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    +1 Or, to avoid extra work, put the three polygons into a single layer and Union that layer with itself.
    – whuber
    May 17 '13 at 14:56

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