Stamp Duty Land Tax Rebate

Stamp Duty Land Tax Rebate (SDLT)

Our panel of carefully selected Specialist Tax Advisors are always here to support and assist you when needed.

What is Stamp Duty Land Tax Rebate?

It is possible to claim back or reduce the Stamp Duty Land Tax (SDLT) on a property purchased as a main residence or second home for example a buy to let property, if it was uninhabitable at the time of purchase. However, specific criteria must be met, and the relief process can be complex.

Key Points for Claiming SDLT on an Uninhabitable Property

1. Definition of 'Uninhabitable: To qualify, the property must meet HMRC's definition of "uninhabitable," which is typically quite strict. Generally, the property must lack essentials like:

• A functioning bathroom or kitchen
• Safe drinking water
• Electricity or Gas
• Structural soundness (unsafe due to significant disrepair)

Cosmetic issues alone (like needing decoration or minor repairs) do not qualify a property as uninhabitable.

1. SDLT Calculation on Non-Residential or Mixed-Use Property Rates: If the property is deemed uninhabitable, it may be considered a non-residential or mixed-use property for SDLT purposes, which could mean lower tax rates. Non-residential SDLT rates are lower than those for residential properties, particularly for higher-value properties.

2. Claiming a Refund: If SDLT was paid at the higher residential rate but it is later determined that the property should have been taxed at the non-residential rate (due to being uninhabitable), you can submit a claim for a refund. This needs to be done within 12 months of the filing date for the SDLT return.

3. Evidence Requirements: HMRC will require evidence to support that the property was genuinely uninhabitable at the time of purchase. Which may include:

• A surveyor’s report
• Photographic evidence
• Documentation from local authorities or utilities, if applicable

Additional Dwelling Supplement (ADS) Relief: If you already own another property, you may have paid an extra 3% SDLT surcharge (the Additional Dwelling Supplement or ADS). If the property was uninhabitable and purchased as a main residence replacement, you may also be able to reclaim this surcharge.

Practical Steps to Claim SDLT Relief

• Review SDLT Guidance: HMRC’s website provides specific details on what constitutes uninhabitable property.
• File an SDLT Reclaim: If you believe you overpaid SDLT, you can apply for a refund directly through HMRC within the allowed timeframe.
• Seek Professional Advice: Given the complexities and evidence required, consulting a property solicitor or tax advisor who specializes in SDLT can be beneficial to strengthen your case.

It's worth noting that HMRC is generally strict with such claims, so ensuring that your evidence meets their standards is essential, and you have the right support.

Find out how our panel of Specialist Tax Advisors can assist you to claim back overpaid Stamp Duty.