Can you still claim SDLT relief for an uninhabitable property after Mudan v HMRC?

Introduction

Buyers sometimes ask whether they can reclaim Stamp Duty Land Tax (SDLT) because a property was not suitable for use as a dwelling at the date of purchase. Another related question is whether part of the purchase price can be allocated to removable chattels, which may reduce the amount charged to SDLT.

These issues often arise together where a buyer has acquired a run-down residential property, has survey evidence and photographs, and wants to know whether to make an SDLT repayment claim within the statutory time limit. The legal position on “unsuitable for use as a dwelling” has become stricter, and the 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 residential property in poor condition and obtained a survey report, a TA10 form and photographs showing the state of the property and its contents. The buyer wanted to know two things:

• whether to make an SDLT refund claim on the basis that the property was uninhabitable at completion; and
• whether a valuation of fixtures, fittings and chattels could reduce the SDLT chargeable consideration.

The buyer was particularly concerned about waiting for the outcome of the Mudan litigation before deciding whether to submit an SDLT claim within the four-year amendment or repayment window.

Nick’s Explanation

Nick’s response, in substance, was that the buyer’s concern about Mudan was understandable because the earlier tribunal reasoning did not give a simple bright-line rule. The focus was on whether the condition of the property and the works required were serious enough to affect its suitability for use as a dwelling at the effective date of the transaction.

He also dealt with the separate chattels issue by explaining that the contents shown in the photographs could be catalogued, placed into a spreadsheet and then valued, so that any genuinely removable items could be considered when working out whether the SDLT chargeable consideration should be reduced.

In anonymised form, the key point from Nick’s explanation was this: the decision on an “uninhabitable” claim depended on the legal outcome in Mudan, while the chattels point required evidence, listing and valuation before any SDLT adjustment could be calculated.

The Law

SDLT is charged on land transactions under the Finance Act 2003. Whether higher residential rates apply depends in part on whether the subject matter is residential property.

Section 116 Finance Act 2003 defines “residential property”. Broadly, land is residential property if it consists of or includes:

• a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use;
• land that forms part of the garden or grounds of such a building; or
• an interest or right over land that subsists for the benefit of such a building or land.

If a building is not suitable for use as a dwelling at the effective date of the transaction, that can affect whether the property is treated as residential for SDLT purposes. However, the courts have repeatedly stressed that this is a fact-sensitive test and that disrepair alone is not enough.

The leading modern authority is now Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. Following that Court of Appeal decision, the condition threshold is relatively high. A property will not cease to be suitable for use as a dwelling merely because it needs repair, modernisation, replacement items, or even fairly extensive works. The question is whether, viewed objectively at completion, the building was truly unsuitable for use as a dwelling, not simply unattractive, inconvenient or in disrepair.

On chattels, SDLT is generally charged on consideration for land and things forming part of the land. Genuine chattels, meaning movable items that do not form part of the land, are not chargeable to SDLT if a justifiable part of the purchase price is properly attributable to them. The distinction between fixtures and chattels is governed by general property law principles, especially the degree and purpose of annexation.

Analysis

The first issue is the condition of the property at the date of completion. The legal test is not whether the property needed substantial expenditure or whether a buyer would sensibly choose to move in immediately. The test is whether it was suitable for use as a dwelling at that date.

After Mudan, the bar is high. Problems such as dated interiors, missing cosmetic finishes, defective services that can be repaired, damp, damaged plaster, old kitchens or bathrooms, or a general need for renovation will often be insufficient on their own. Even where works are significant, the courts may still find that the building remained a dwelling in substance.

In practical terms, a buyer considering an “uninhabitable” SDLT claim should ask:

• Was there a functioning structure capable of residential occupation?
• Were the defects so serious that the building could not realistically be used as a dwelling at all?
• Is there strong contemporaneous evidence from the completion date, such as survey reports, photographs, contractor evidence and utility evidence?
• Do the defects go beyond disrepair and amount to genuine unsuitability?

The second issue is chattels. This is legally separate from the “unsuitable for use” argument. A buyer may fail on uninhabitability but still be entitled to reduce chargeable consideration if part of the price was paid for genuine chattels.

That exercise requires evidence and discipline. Photographs and the TA10 form can help identify items left at the property. Those items then need to be classified properly:

• fixtures, which remain part of the land and are still within SDLT;
• fittings, which may or may not be fixtures depending on annexation and purpose; and
• chattels, which are movable and outside SDLT if separately valued on a realistic basis.

A spreadsheet is often used to list each item, describe it, state whether it is likely to be a fixture or chattel, and assign a second-hand market value rather than a replacement cost. Inflated valuations are likely to be challenged by HMRC.

The fact that there is no formal inventory report does not necessarily prevent a chattels analysis, but it makes the evidence more dependent on photographs, the TA10 and any sale correspondence. The stronger the evidence showing what was included in the transaction and what those items were actually worth, the stronger the SDLT position.

As for timing, SDLT claims and amendments are subject to statutory time limits. A buyer who is considering a claim because of property condition should not assume that waiting for more case law is risk-free. The availability of any repayment route depends on the precise procedural posture of the case, the type of claim being made and whether the relevant time limit has expired.

Outcome

The practical conclusion is that an SDLT claim based on a property being uninhabitable is now harder to sustain than many buyers assume. Following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the condition threshold is relatively high. A property that merely requires repair or renovation will often still count as suitable for use as a dwelling.

However, a separate and potentially more straightforward SDLT reduction may still be available where part of the price was genuinely paid for removable chattels and those items can be properly evidenced and realistically valued.

Practical Steps

• Review the completion-date evidence carefully, including the survey, photographs, TA10 form and any contractor or utility evidence.
• Assess the property condition against the stricter post-Mudan threshold, not against a general impression that the property was in poor shape.
• Prepare a schedule of all items included in the purchase and separate likely fixtures from likely chattels.
• Use realistic second-hand values for any claimed chattels, not insurance or replacement values.
• Check the SDLT filing, amendment and repayment deadlines without delay.
• If considering a formal claim, make sure the legal basis is clearly identified: uninhabitability, chattels, or both.

Conclusion

A buyer should approach these two SDLT issues separately. Claims that a property was not suitable for use as a dwelling are now difficult unless the defects were truly severe at completion. By contrast, a carefully evidenced chattels valuation may still reduce SDLT where part of the purchase price was paid for genuine movable items.

Legal References Used

• Finance Act 2003, section 116
• 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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