Can you reclaim SDLT for an uninhabitable home if you already paid mixed-use rates on an equestrian property?

Introduction

Buyers sometimes ask whether they can reclaim Stamp Duty Land Tax (SDLT) where a dwelling was in very poor condition at the date of purchase. This often comes up where a property has been empty for a long time, contains asbestos, or needs major works before anyone can live there.

In some cases, a claim is considered on the basis that the dwelling was not suitable for use as a dwelling at the effective date of the transaction. But where the property was already taxed at non-residential or mixed-use rates, the practical question is different: would an “uninhabitable” argument actually reduce the SDLT any further?

For an equestrian property with a house and stables, the answer will often be no, because mixed-use treatment already gives the non-residential SDLT rates.

The Question

A buyer purchased an equestrian property comprising a house and stables for just over £1.16 million and paid SDLT of £47,812. The buyer asks whether an SDLT reclaim may be available because the house had been empty for several years and asbestos was reportedly present throughout, including in the water tank.

The key issue is whether the buyer could make an “uninhabitable property” argument to recover part of the SDLT already paid.

Nick’s Explanation

Nick’s view was that the SDLT already paid appeared to be based on non-residential rates, and that this was likely correct because an equestrian property with a house and stables is commonly treated as mixed-use for SDLT purposes.

In anonymised form, his reasoning was:

“It appears that non-residential rates of stamp duty were paid. In my view, that was likely the correct treatment because an equestrian property would usually be classed as mixed-use for stamp duty purposes. If the property were instead treated as uninhabitable, that would also point to non-residential rates, producing the same SDLT figure. In short, the least amount of stamp duty appears already to have been paid.”

That is the central point. Even if the dwelling condition were poor enough to support an argument that it was not suitable for use as a dwelling, that would not create a refund if the purchase had already been taxed at the non-residential or mixed-use rates.

The Law

SDLT is charged under Finance Act 2003. Different rates apply depending on whether the subject matter of the transaction is:

• entirely residential property, or
• non-residential or mixed-use property.

A transaction is generally treated as mixed-use if it includes both residential property and non-residential property. Land used for equestrian or other non-residential purposes can be relevant to that classification, depending on the facts.

Where a building that looks like a dwelling is so defective at the effective date of the transaction that it is not suitable for use as a dwelling, it may fall outside the residential SDLT rules. Historically, buyers sometimes argued that severe disrepair meant the dwelling was not residential property for SDLT purposes.

However, the legal threshold for this argument is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. The Court of Appeal confirmed that the test is demanding. Serious defects, long-term vacancy, or the need for substantial repair do not automatically mean a property was not suitable for use as a dwelling at the relevant date.

Analysis

The position can be analysed in stages.

First, look at the SDLT already paid. On a purchase price of £1,166,252, an SDLT figure of £47,812 is consistent with non-residential rates rather than standard residential rates. That strongly suggests the transaction was already treated as mixed-use or otherwise non-residential for SDLT purposes.

Second, consider why that may have happened. An equestrian property with a house and stables may include non-residential elements. If the land and buildings were not wholly residential in character and use, mixed-use treatment may well have been correct. If so, the buyer already benefited from the non-residential SDLT rate structure.

Third, ask what an “uninhabitable” claim would change. If the dwelling was truly not suitable for use as a dwelling at completion, the usual SDLT consequence argued by taxpayers is that the purchase should not be taxed as residential property. But if the transaction was already taxed at non-residential or mixed-use rates, there may be no lower rate left to claim. In practical terms, the argument does not produce a repayment if it leads to the same SDLT calculation already used.

Fourth, the condition evidence itself would need careful scrutiny. The fact that a property had asbestos, had been empty for five years, or needed significant works does not by itself establish that it was not suitable for use as a dwelling. After Mudan, the courts require a high threshold. The question is not simply whether the property was unattractive, unsafe in some respects, or in need of major refurbishment. The question is whether, at the effective date, the building had crossed the line so that it was not suitable for use as a dwelling at all.

Fifth, even if that high threshold could be met on the facts, the buyer would still need to show that the SDLT originally paid was higher than the SDLT legally due. Here, on the figures given, that does not appear to be the case.

Outcome

On these facts, the practical conclusion is that an SDLT reclaim is unlikely to produce any refund.

The likely reason is simple: the purchase appears already to have been taxed at non-residential or mixed-use rates, which are the same rates that would generally apply if the dwelling condition were severe enough to take it outside the residential rules. In other words, the buyer appears already to have paid the lowest SDLT likely to be due.

Practical Steps

If a buyer wants to check their position properly, the sensible steps are:

• obtain and review the SDLT return that was filed on completion;
• confirm whether the return treated the property as mixed-use or non-residential;
• review the title, plan, and actual use of the land at completion to confirm the mixed-use analysis;
• review the survey and any specialist reports to see what they actually say about the condition of the dwelling at the effective date;
• compare the SDLT paid with the SDLT that would have been due under any alternative analysis.

If the SDLT return already used non-residential rates, the next question is not whether the property was uninhabitable in some general sense, but whether any alternative legal analysis would produce a lower tax figure. In a case like this, that appears unlikely.

Where a buyer is still considering an “unsuitable for use” argument, they should bear in mind that the threshold is now relatively high after Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Conclusion

If an equestrian property was already assessed at mixed-use or non-residential SDLT rates, an “uninhabitable property” reclaim will usually not lead to any repayment. On the figures provided, the SDLT already paid appears to be the minimum likely liability.

Legal References Used

• Finance Act 2003
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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