SDLT on Uninhabitable Property and Chattels after Mudan
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Can you claim an SDLT refund if a property was uninhabitable, and can chattels reduce the SDLT price?
Introduction
Buyers sometimes ask whether they can recover Stamp Duty Land Tax (SDLT) after buying a property that needed major repair work, or whether the purchase price can be reduced for SDLT purposes by separating out fixtures, fittings and chattels.
These questions often arise together. A buyer may feel that a dwelling was not fit to live in at completion, while also believing that part of the agreed price was really paid for removable items rather than the land and building itself.
The legal position needs careful analysis. In particular, the threshold for showing that a dwelling was not suitable for use as a dwelling is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.
The Question
A buyer had purchased a residential property and was considering whether to make an SDLT refund claim on the basis that the property was uninhabitable at the effective date of the transaction. The buyer was also gathering evidence about fixtures, fittings and chattels, including a survey report, a TA10 form and photographs, to see whether any part of the purchase price could properly be attributed to removable items and therefore excluded from SDLT.
The buyer’s concern was whether it was sensible to wait for the final outcome in the Mudan litigation before deciding whether to submit a claim within the statutory time limit, and how the chattels evidence should be organised for valuation purposes.
Nick’s Explanation
Nick’s response, in substance, was that the evidence needed to be gathered and organised carefully, particularly in relation to any claimed chattels. The images and supporting documents were being catalogued so that a spreadsheet of relevant items could be prepared and valued.
On the uninhabitable property point, the underlying issue raised by the buyer was whether earlier decisions in Mudan provided a sufficiently clear basis for deciding when disrepair makes a property unsuitable for use as a dwelling. That concern was understandable. The courts have had to distinguish between a property that is merely in poor condition and one that is so defective at the effective date of the transaction that it is not suitable for use as a dwelling at all.
In practical terms, Nick’s approach was to gather the factual material first and then assess the legal position in light of the current authorities. That is the right order: evidence first, legal classification second.
The Law
SDLT is charged under the Finance Act 2003. The amount payable depends on the chargeable consideration for the land transaction and the nature of the property acquired.
For residential rates to apply, the subject matter must be residential property within the meaning of the legislation. Broadly, that 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.
Where a buyer argues that a property was not suitable for use as a dwelling at the effective date of the transaction, the question is not whether the property was attractive, modern, comfortable or in good repair. The question is whether, viewed realistically, it was suitable for use as a dwelling at that time.
The Court of Appeal in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799 confirmed that the threshold is relatively high. Serious defects do not automatically make a property unsuitable for use as a dwelling. Many properties in poor condition remain dwellings for SDLT purposes even if they require substantial works.
A separate issue concerns chattels. SDLT is charged on consideration given for land, buildings and items forming part of the land transaction. Genuine chattels, meaning removable items that are not fixtures and do not form part of the land, are generally outside the SDLT charge. If part of the purchase price is properly attributable to chattels, that amount may be excluded from the chargeable consideration. However, the allocation must be genuine, evidence-based and reflect market value.
Analysis
The first step is to separate the two issues:
- whether the property was unsuitable for use as a dwelling at completion; and
- whether part of the price was paid for removable chattels rather than the property itself.
They are legally distinct and should not be conflated.
On habitability, the buyer would need evidence showing the physical condition of the property at the effective date of the transaction. This may include a survey, photographs, contractor reports and other contemporaneous material. But evidence of disrepair alone is not enough. After Mudan, the courts are looking for defects that go beyond the ordinary idea of a run-down or renovation property. The fact that repairs are needed, even major repairs, does not by itself mean the building was not suitable for use as a dwelling.
Examples that may be relevant include the absence of basic facilities, severe structural or safety defects, or conditions that prevent ordinary residential occupation at the relevant date. Even then, the court will assess the property as a whole. The test is demanding.
That is why waiting for the final appellate position in a leading case may once have seemed sensible. However, now that the Court of Appeal has decided Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the law is clearer: the condition threshold is relatively high, and many claims based only on extensive repair needs will fail.
On chattels, the buyer’s photographs, TA10 form and survey material can be useful, but they must be turned into a structured schedule. The practical task is to identify each item and classify it correctly:
- fixtures, which usually remain part of the land and stay within SDLT;
- fittings, which may or may not be fixtures depending on degree and purpose of annexation; and
- chattels, which are movable items and can in principle be excluded.
Typical examples of possible chattels may include freestanding white goods, curtains, certain items of furniture, rugs or garden furniture, depending on the facts. By contrast, built-in kitchen units, sanitary ware, fitted wardrobes and items attached to the property for permanent use are commonly fixtures rather than chattels.
Once the items are identified, they should be valued realistically at second-hand market value as at the transaction date, not replacement cost and not an inflated figure designed to reduce SDLT. A spreadsheet is often the best way to do this, listing each item, its description, evidence source and value.
The buyer also mentioned the four-year period for a refund claim. Time limits matter. A buyer considering an amendment, overpayment relief or other SDLT recovery route should check which statutory route applies and whether the relevant deadline has already passed or is approaching. Delay can be fatal to a claim even where the underlying point has merit.
Outcome
The practical conclusion is this:
- 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 threshold for showing that a dwelling was not suitable for use as a dwelling is relatively high.
- A separate SDLT reduction may still be available if part of the purchase price was genuinely paid for chattels, but that depends on careful identification and realistic valuation of the items.
- Evidence should be organised promptly, especially where a statutory time limit may be running.
Practical Steps
If you are assessing a similar SDLT position, the sensible next steps are:
- Obtain and preserve contemporaneous evidence of the property’s condition at completion, including surveys, photographs, reports and correspondence.
- Assess the condition issue against the high threshold confirmed in Mudan, rather than assuming that major renovation needs are enough.
- Prepare a full schedule of alleged chattels from the TA10 form, photographs and any inventory material.
- Separate genuine removable items from fixtures and built-in elements.
- Apply realistic second-hand market values to any genuine chattels.
- Check the SDLT filing position and the relevant statutory deadline for any amendment or repayment claim.
- Keep a clear audit trail showing how any figures were calculated.
Conclusion
A property does not cease to be a dwelling for SDLT purposes just because it is in poor condition or needs extensive works. After Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the bar is relatively high. Buyers may still be able to reduce SDLT where part of the price was genuinely paid for chattels, but that requires careful classification and evidence-based valuation.
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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