Probate Properties: Getting Stamp Duty Relief
Companies buying probate properties may be eligible for Stamp Duty relief. Certain conditions must be met before and after purchasing the property to be exempt. 1 in 3 overpay HMRC in Stamp Duty. If you overpaid Stamp Duty on a probate property in the last 4 years, you could get a refund.
Trusted by our customers
Trusted by our customers
What is probate property Stamp Duty relief?
Property traders buying probate homes to renovate and resell don’t pay Stamp Duty if they qualify for relief. Conditions must be met to be eligible. The main criteria is that the purchase must be made in the course of business and the deceased person must have lived in the property in the two years before. You can get partial relief and pay less Stamp Duty if only some of the conditions are met.
What qualifies for Stamp Duty probate relief?
It’s a business purchase
It was the deceased person’s main or only home
The land is no more than 0.5 of a hectare*
Are you owed thousands in Stamp Duty?
- What is NOT Eligible For Probate Relief?
- Buying a probate property you intend to live in
- A property trader selling the home to an employee or anyone connected to them after renovation
- Granting a lease or license on the property after purchase, e.g., you rent the home to a tenant
- Spending more than £10,000 or 5% of the purchase price, whichever is more, up to £20,000, on non-essential work during refurbishment
- The property was NOT the deceased person’s main or only home and was part of a portfolio of properties they owned
- What Costs Qualify For Probate Relief?
- HMRC does not provide an exact definition for what costs qualify as essential and non-essential, but we can make assumptions. For example, the following costs may not contribute towards the spending limit on refurbishment work.
-
Clean Up
Like the cost of deep cleaning services, pest control, skip hire, waste removal, or asbestos remedial work. -
Removing Safety Hazards
Like the costs of fixing trip hazards, removing dangerous trees, remedying structural issues, or fixing an unsafe bathroom. -
Bringing Necessities Up To Modern Safety Standards
Like the costs of rewiring poor electrical work or replacing an unsafe boiler.
Example
Calculating probate Stamp Duty relief
Calculate the Stamp Duty you might pay based on the rates for your purchase type.
- Residential Stamp Duty Rates
- 0% up to £250,000
- 5% on the proportion from £250,001 to £925,000
- 10% on the proportion from £925,001 to £1.5 million
- 12% on any remaining amount over £1.5 million
- Company Residential Stamp Duty Rates
- 3% up to £250,000
- 8% on the proportion from £250,001 to £925,000
- 13% on the proportion from £925,001 to £1.5 million
- 15% on any remaining amount over £1.5 million
- Probate Residential Stamp Duty Rates Where a Property Qualifies For Relief
-
0%, unless partial relief is available:
For partial relief, the amount chargeable is the difference between the market value of the permitted area, that is the old dwelling and grounds allowed, and the total market value of the old dwelling, including all the land.
Claiming probate property relief
Homeowners buying a house in probate must pay the standard Stamp Duty rates for residential properties. Property traders buying a probate home don’t pay Stamp Duty if certain conditions are met (see below).
When these conditions aren’t met, property traders pay a 3% surcharge on the standard Stamp Duty rates for buying a property as a company.
To pay no Stamp Duty for probate properties, you must meet the following criteria:
- You are a property trader (not a sole trader)
- It was the deceased person’s main or only home
- The land does not exceed 0.5 hectares
You can get partial Stamp Duty relief if you meet the first two conditions but don’t meet the third (the land exceeds the given limit).
The amount that’s chargeable for Stamp Duty is calculated as the difference between the market value of the permitted area and the total market value of the old dwelling, including all the land.
Are you owed thousands in Stamp Duty?
Client reviews
Are you owed thousands in Stamp Duty?
Frequently asked questions about probate Stamp Duty
When buying a probate property to live in, you pay the standard Stamp Duty rates for a residential property. You don’t pay Stamp Duty on a probate home if you’re a property trader buying under certain conditions.
For example, if the land is smaller than 0.5 hectares, it was the deceased person’s main or only residence, and you are buying to renovate and resell, you don’t pay Stamp Duty. You also must only spend a certain amount on non-essential refurbishments after purchase to qualify for relief.
If these conditions are not met, you pay a 3% surcharge when buying a probate property as a company or property trader.
Probate properties are only exempt from Stamp Duty Land Tax (SDLT) in certain situations. Buyers purchasing a probate property to live in must pay Stamp Duty at the standard residential rates. Property developers buying a probate home to refurbish and resell might not pay Stamp Duty if they meet certain criteria.
Get in touch with us
A property trader buys a house for £300,000.
They spend £5,000 on replacing a faulty boiler and £10,000 on updating the kitchen and bathroom.
The £5,000 spent on the boiler was necessary to ensure the home meets the minimum safety standards.
Because they only spent £10,000 on renovation work that enhanced or increased the property’s value (the kitchen and bathroom remodelling work), they qualify for Probate Stamp Duty relief.