Can you reclaim SDLT as mixed-use when a property purchase includes a commercial boatyard and a dwelling?

Introduction

People often search for this issue after buying a property that includes both residential and commercial elements. A common example is a dwelling bought together with land, buildings or business premises that are not purely residential. The key SDLT question is whether the transaction should have been taxed at residential rates or non-residential rates.

Another practical issue also arises in repayment claims: HMRC usually expects the repayment to go to the same legal person that paid the tax. If the buyer is a company, but the repayment bank account is in an individual’s name, that can create problems and delay or prevent payment.

The Question

A company bought two linked titles in one overall transaction. One title included a dwelling. The other title comprised a boatyard that had been operated as a commercial enterprise. SDLT was originally paid on a residential basis.

The buyer later considered whether the transaction should instead have been treated as non-residential or mixed-use, which would produce a substantial reclaim. There was also a practical concern about repayment details, because the claim had been prepared through an authorised individual, while the available bank account was in a different name from the company that owned the property.

Nick’s Explanation

Nick’s reasoning had two parts: the technical SDLT analysis and the repayment mechanics.

On the repayment point, he explained that HMRC is careful about payee consistency in SDLT reclaims. In anonymised terms, his view was that the safest course was for the repayment account to be in the company’s own name, because the company was the legal purchaser and the person to whom any overpaid SDLT would be repaid. He noted that using an individual’s account where the property is owned by a company can create avoidable risk.

On the SDLT analysis, Nick’s view was that the strongest argument was reclassification from residential to non-residential on a mixed-use basis. In substance, he said:

• the boatyard was a commercial enterprise;
• it was held under a separate title;
• there was third-party evidence supporting its commercial character; and
• because the titles were bought in a linked transaction, the whole transaction should be considered together.

He also raised an alternative argument that the dwelling was not fit for habitation. However, that argument is now harder to sustain than many buyers assume.

The Law

SDLT is charged under the Finance Act 2003. The applicable rate depends on the nature of the subject matter acquired.

Broadly:

• residential property is taxed under the residential SDLT rules;
• non-residential property is taxed under the non-residential rules; and
• where a transaction is mixed-use, non-residential rates apply to the transaction.

The legislation also requires linked transactions to be considered together where they form part of a single scheme, arrangement or series of transactions between the same buyer and seller or connected parties. If a residential title and a commercial title are acquired in linked transactions, the SDLT treatment must be assessed on that combined basis.

HMRC’s published guidance on non-residential and mixed rates reflects this general approach: if the transaction includes both residential and non-residential property, non-residential rates apply.

As to uninhabitable dwellings, the courts have made clear that the threshold is not a light one. In Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the Court of Appeal confirmed that the condition thresholds are now relatively high. A building does not cease to be residential merely because it needs repair, modernisation or substantial work. The question is whether it is truly unsuitable for use as a dwelling at the effective date of the transaction.

Analysis

The analysis usually works in four steps.

First, identify exactly what was bought. If the purchase included a dwelling and a boatyard, yard, workshop, storage area, commercial land or another business element, the transaction may not be purely residential.

Second, ask whether the non-residential element was genuine and legally part of the acquisition. Evidence matters. Separate title, planning history, business records, leases, trading evidence, photographs, valuation material and third-party documents can all help show that the non-residential element was real and not merely incidental.

Third, consider whether the acquisitions were linked transactions. If the dwelling and the commercial title were bought together as part of one overall deal, they are likely to be linked. If so, the SDLT position is assessed across the combined transaction, not title by title in isolation.

Fourth, consider whether there is any separate argument that the dwelling was not suitable for use as a dwelling. That should now be treated cautiously. Following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the bar is relatively high. Serious disrepair alone will not always be enough. The mixed-use argument is often stronger where there is a genuine commercial component.

Applying those steps to this scenario, the mixed-use argument appears to be the main route. If the boatyard was genuinely commercial, separately identifiable, and acquired in a linked transaction with the dwelling, there is a strong basis for arguing that non-residential SDLT rates should have applied to the whole acquisition.

The repayment mechanics then need to match the legal ownership. If the company bought the property and overpaid the SDLT, HMRC will usually expect the repayment to be made to an account in the company’s name. An authorised individual may handle the claim, but that does not change who the taxpayer is.

Outcome

Where a company buys a dwelling together with a genuine commercial boatyard in linked transactions, the purchase may qualify for non-residential SDLT treatment on a mixed-use basis. If residential rates were paid originally, a reclaim may be available.

The stronger argument is likely to be mixed-use rather than uninhabitable dwelling status, especially because the threshold for saying a dwelling is not suitable for use is now relatively high after Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

For repayment purposes, the safest practical course is usually to ensure the bank account receiving the refund is in the legal purchaser’s name, particularly where the purchaser is a company.

Practical Steps

• Check the transfer documents, titles and contract pack to confirm exactly what was acquired.
• Identify whether the residential and commercial elements formed one linked transaction.
• Gather evidence showing the commercial use of the non-residential element, such as title documents, planning records, business records, photographs and third-party confirmations.
• Review the SDLT return originally filed and compare the tax paid with the tax that would have been due at non-residential rates.
• If the buyer was a company, make sure the repayment details are consistent with the company as legal purchaser.
• Treat any “not suitable for use as a dwelling” argument with care and assess it against the higher threshold confirmed in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Conclusion

If a purchase included both a dwelling and a genuine commercial boatyard acquired in linked transactions, there may be a sound basis for an SDLT reclaim on mixed-use grounds. The repayment process should also be handled carefully so that the payee details match the legal purchaser. Where uninhabitability is raised as an alternative argument, it should be tested against the now stricter legal threshold.

Legal References Used

• Finance Act 2003
• HMRC guidance: Stamp Duty Land Tax: Non-residential and Mixed Rates
• HMRC guidance: Corporation Tax: Trading and Non-Trading
• 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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