Stamp Duty Refund for Uninhabitable Property
With 1 in 3 buyers overpaying HMRC in Stamp Duty, you could get a refund if a property you purchased should have been deemed “uninhabitable” at the time. Check your eligibility for a Stamp Duty refund or reach out to our expert team to discuss your case.
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What is an uninhabitable property?
An uninhabitable property is a building that requires extensive work after purchase to make it suitable to live in. Generally, properties are considered uninhabitable if they have structural damage and/or don’t have the necessities required for everyday living, like running water and central heating.
Examples of uninhabitable properties
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Example 1:
A property is purchased with no central heating, boiler or pipework. As a result, there’s no running water and it’s really cold. The floorboards have also been removed and there is structural damage to the roof. Because it lacks the basic necessities, it may be classed as uninhabitable by HMRC.
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Example 2:
A property has been abandoned for years. Mould and asbestos are present throughout the building. All pipework and heating systems are damaged and do not work. Because it’s an unsafe environment to live in and lacks the basic necessities, it may be eligible for the Uninhabitable Relief.
Important Information: Should you get an SLDT refund after the Bewley vs HMRC Case?
A couple successfully argued for a lower amount of Stamp Duty to be paid for an uninhabitable property. Since then, a new precedence has been set for refunds under the Uninhabitable clause.
Are you owed thousands in Stamp Duty?
Case study
What makes a property uninhabitable?
HMRC doesn’t give an exact definition of the condition a property must be in to meet the criteria for Uninhabitable Relief. However, based on the Housing Act 1967 requirements, your property may have been eligible if it had:
Extreme or rampant mould
Exposed asbestos fibres or dust
An unsafe electrical system
No clean running water
Hazardous chemicals
Severe structural damage internally or externally
No protection from the elements, e.g., a suitable roof, windows, or doors
Animal, plant, or insect infestations
Are you owed thousands in Stamp Duty?
Claiming an SLDT refund for an uninhabitable property
An SLDT (Stamp Duty Land Tax) refund can be applied for if you overpaid or were overcharged Stamp Duty on a property purchased up to 4 years ago. Learn more about SLDT Refunds and how to claim.
You can only get an SLDT refund if your property purchase was eligible for relief at the time of purchase. For example, if it was uninhabitable, a Probate property, a Mixed Use dwelling, or a Group Relief purchase.
Applications for SLDT refunds can be made online or via post to HMRC within 4 years of buying the property.
In 2022, HMRC issued a warning against homebuyers submitting “spurious” tax relief claims. Check your eligibility for a Stamp Duty refund with our expert team before applying to see how much you could be owed.
Are you owed thousands in Stamp Duty?
Claiming a Stamp Duty refund for properties with asbestos
Properties with toxic levels of asbestos may be considered uninhabitable and therefore eligible for Stamp Duty relief. You could get a refund if you paid the higher taxation amount on a property with exposed asbestos.
What is Asbestos? Asbestos is an extremely toxic fibrous mineral found in building materials that, when disturbed, can cause serious health conditions, including chronic lung disease and cancer.
To apply for a refund because asbestos was present, you may need evidence like:
- A copy of an Asbestos Refurbishment & Demolition Survey report conducted at the time of purchase
- A copy of an Air Quality Test (with results showing more than 0.01 f/ml) completed before purchase
Calculating your potential SDLT refund
Every case is different. We check your eligibility for all available reliefs with a fine-tooth comb. We ensure no detail was missed during the purchase of your property. If it was, we can help get your money back.
- Single Home 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
- Second Home 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
- Non-Residential Stamp Duty Rates (including uninhabitable properties)
- 0% up to £150,000
- 2% on the proportion from £150,001 to £250,000
- 5% on any remaining amount over £250,000
Are you owed thousands in Stamp Duty?
Client reviews
Are you owed thousands in Stamp Duty?
Frequently asked questions about uninhabitable properties
Yes, if the higher amount of Stamp Duty was paid on a property that was initially deemed uninhabitable, you can claim an SLDT refund. It’s important to check if a property you bought in the last 4 years could be eligible for a refund. Changes in regulations from the Bewley vs HMRC case could mean you’re now eligible.
You don’t pay any Stamp Duty on an uninhabitable property that costs under £150,000. You pay a lower rate for uninhabitable properties compared to residential homes on anything over this amount. The rates are 2% on the proportion between £150,001 to £250,000 and 5% on anything over £250,000.
A property is unhabitable if it is unsafe or unsuitable to live in. You’ll need evidence to prove the condition of a property and that it’s unsuitable to live in.
Documents that can be used as evidence include:
- Lender Valuation Report completed by the mortgage provider after acceptance of the offer
- TA6 Property Information Form detailing the faults and overall condition of the property, completed by the seller
- RCIS Level 1, Level 2, or Level 3 Homebuyers Survey detailing the condition of the property
- Asbestos Refurbishment & Demolition Survey or Air Quality Test evidencing abnormal and dangerous levels of asbestos dust or fibres in the air
- Photos of the property and its condition
A landlord must ensure that a property is suitable for a tenant to live in. This means it’s safe, healthy and free of things that can cause harm.
Some examples of uninhabitable living include:
- No access to heating or hot water
- Issues with water supply, sanitation and drainage
- Damp and mould growth
- Rodent or pest infestations
- No access to electricity
- Structural issues or severe structural damage
- Poor security, like not having a lock on the front door
Few lenders offer a mortgage on a property that’s deemed uninhabitable, but it’s still possible to get a mortgage on an uninhabitable home. The more problematic a property is, the harder it is to get a mortgage approved. Bridging loans are often used as an alternative, which offer buyers the cashflow to make a property habitable before applying for a residential mortgage.
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A couple bought a bungalow in very poor condition. It had been derelict for years and had no central heating, floorboards, boiler or pipework. These were removed before the sale. As a result, it was riddled with asbestos. The couple planned to demolish the bungalow and rebuild it after purchase.
Initially, the couple were charged the higher taxation rates (a 3% surcharge to the residential rates) on the basis that it was a second home.
However, because the property was in such a bad way, it was later deemed uninhabitable by the Tax Tribunal. It was then classed as a non-residential purchase, so the couple didn’t have to pay the higher amount.
Reference: Bewley vs HMRC 2019 case