Can you reclaim SDLT on an uninhabitable property bought in 2019?

Introduction

Buyers often search for this issue after learning that a property may not have counted as “residential” for Stamp Duty Land Tax purposes when it was bought. A common example is a dwelling said to be uninhabitable at completion because of serious defects or hazardous condition issues. The question then becomes whether SDLT can be reclaimed years later.

The answer usually turns on two separate points. First, was the property genuinely not suitable for use as a dwelling on the effective date of the transaction? Second, is the claim still within HMRC’s time limit? Even where the condition point might once have been arguable, a late claim can fail simply because it is out of time. Also, in uninhabitable cases, the legal threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

The Question

A buyer purchased a property in 2019. At the time of purchase, the property was said to be uninhabitable and the buyer later obtained public-sector loan assistance aimed at bringing an empty or poor-condition home back into use. The buyer wanted to know whether SDLT could still be reclaimed on the basis that the dwelling was not habitable when bought, and if so, how to make the claim. The buyer then asked whether there was any way around the four-year time limit for making the claim, including where personal health issues had affected matters at the time.

Nick’s Explanation

Nick’s central point was that the practical problem was the time limit. In anonymised form, his advice was:

“The property had to be purchased within the last four years to be able to make a claim.”

He also explained that attempts to recover SDLT after that period generally do not succeed just because the taxpayer did not know about the point or only later realised that a claim might have been possible. As he put it in substance, saying that it was a mistake or that the buyer did not know is not normally enough.

Nick further noted that HMRC may in some contexts accept a late claim where the delay arose from circumstances outside the taxpayer’s control. He referred to HMRC’s approach in the higher rates refund context, where exceptional circumstances were recognised in limited situations. But his view on the facts presented was that personal health issues were unlikely to be accepted by HMRC as a sufficient basis for an out-of-time SDLT reclaim in this type of case.

The Law

SDLT is charged under the Finance Act 2003. Whether a property is taxed as residential or non-residential can matter greatly because the rates differ. In some earlier cases, taxpayers argued successfully that a building sold as a house was not “suitable for use as a dwelling” at the effective date of the transaction, so it should not be treated as residential property for SDLT purposes.

However, the law in this area has become stricter. The Court of Appeal in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799 confirmed that the threshold for showing a dwelling was not suitable for use is relatively high. Serious disrepair, needed renovation, or the fact that works are required will not automatically mean the property is non-residential. The question is whether, viewed realistically at completion, the building had ceased to be suitable for use as a dwelling.

Separately, SDLT overpayment claims are subject to statutory time limits. The usual route for correcting an SDLT return or claiming repayment is tightly time-bound. In broad terms, once four years have passed from the filing date or transaction-related deadline, the scope for recovery becomes very limited. HMRC and the tribunal system generally apply those limits strictly.

There are also limited concepts in tax administration where late claims may be entertained if the taxpayer was prevented from acting by circumstances outside their control. But that is exceptional, fact-sensitive, and not a general escape from statutory time limits.

Analysis

There are two steps to analyse.

First, would the property have qualified on the merits as not suitable for use as a dwelling at the time of purchase? The fact that a local authority or similar body offered an empty homes or regeneration loan may support the idea that the property needed substantial works. But that does not decide the SDLT question. SDLT uses its own legal test. Following Mudan, the condition threshold is now relatively high. A property can be in very poor condition and still remain suitable for use as a dwelling for SDLT purposes. Evidence would need to show something more fundamental at the effective date of the transaction.

Second, even if the buyer had a potentially arguable substantive case, the timing is the main obstacle here. A purchase in 2019 is ordinarily outside the four-year period for making this sort of reclaim by 2024 and certainly by 2025 or later. On the facts described, that makes the claim very unlikely to succeed.

The buyer also asked whether there was any way around the four-year cut-off. In principle, HMRC sometimes recognises exceptional circumstances in specific statutory contexts. But those situations are narrow. A taxpayer usually needs to show that something outside their control directly prevented the claim being made in time. Not knowing about the argument is not enough. Nor is it usually enough simply to say that life was difficult or that the matter was overlooked.

Where serious illness or medical treatment is relied on, the question would be whether it truly prevented the taxpayer, or someone acting for them, from making the claim within the permitted period. Even then, success is uncertain. On the reasoning given by Nick, and as a matter of practical HMRC approach, personal health issues of this kind would be unlikely to overcome the statutory time limit in an SDLT reclaim case of this sort.

Outcome

The practical conclusion is that an SDLT reclaim for a property bought in 2019 is very unlikely to be possible now if the claim depends on arguing that the property was uninhabitable at completion. The main reason is that the claim appears to be out of time. In addition, the underlying “not suitable for use as a dwelling” argument is now harder to establish because the legal threshold is relatively high after Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Practical Steps

If you are assessing a similar case, the sensible steps are:

1. Check the effective date of the transaction and the SDLT filing date.
2. Work out whether four years have already passed for the relevant reclaim route.
3. Gather contemporaneous evidence of condition at completion, such as survey reports, lender correspondence, photographs, contractor assessments, and any documents showing lack of basic facilities or serious hazards.
4. Do not assume that council loan approval, renovation funding, or an empty homes classification proves the SDLT point. It may help factually, but it is not decisive.
5. Assess the condition evidence against the stricter approach confirmed in Mudan.
6. If considering an argument for a late claim, identify a specific and documented circumstance outside your control that directly prevented the claim being made in time.
7. Review whether any later property purchases raise separate SDLT issues, because a different transaction may still be within time even if the 2019 purchase is not.

Conclusion

A property bought in 2019 is generally too old for an SDLT reclaim based on alleged uninhabitability to be made now. Even aside from the time limit, these claims are now harder to win because the courts have set a relatively high bar for showing that a dwelling was not suitable for use at completion.

Legal References Used

• Finance Act 2003
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799
• HMRC guidance: Stamp Duty Land Tax / Higher rates for Additional Dwellings / Refunds and Exceptional Circumstances

This page was last updated on 22 March 2026.

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