Can you reclaim SDLT if a property was mixed-use or a portfolio transfer to a company was taxed incorrectly?

Introduction

People often search for this issue after paying Stamp Duty Land Tax (SDLT) on a purchase or transfer and later realising the property may not have been wholly residential. That matters because mixed-use and non-residential property can be charged at different SDLT rates from residential property. In some cases, that means too much SDLT was paid and a refund may be available.

A common problem arises where a buyer acquires a property with both residential and commercial elements, or where a landlord transfers a portfolio into a limited company and some of the properties are commercial or mixed-use. The key question is whether the transaction was correctly classified for SDLT purposes.

The Question

The scenario can be put like this:

A taxpayer bought a property for around £100,000 and paid about £3,000 in SDLT. The property may have been mixed-use rather than wholly residential. The taxpayer also later transferred a portfolio of properties from personal ownership into a limited company and paid around £10,000 in SDLT. A number of those properties may have been commercial or mixed-use.

The taxpayer wants to know whether the SDLT was overpaid and, if so, whether a reclaim may be possible.

Nick’s Explanation

Nick’s core view was that there were two separate SDLT issues.

First, on the single property purchase, his view was that if the property was properly classified as mixed-use, it should have been charged at non-residential SDLT rates rather than residential rates. In anonymised form, his point was:

“This property should have been assessed as mixed-use for stamp duty purposes and therefore should have been liable for non-residential rates of stamp duty. The actual liability should have been £0, as non-residential rates of stamp duty are 0% up to £150,000.”

Secondly, on the transfer of a portfolio into a company, Nick noted that the position would depend on the details of each property. If a number of the properties were commercial or mixed-use, the SDLT calculation may have been wrong.

He also identified the practical information needed to review the position properly: the SDLT paid, the value used for SDLT, and the characteristics of each property, including whether it was wholly residential or partly commercial.

The Law

SDLT is charged under the Finance Act 2003. The amount payable depends on the chargeable consideration and the nature of the subject matter acquired.

For SDLT purposes, an important distinction is drawn between:

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

Broadly, a transaction is mixed-use if the property acquired consists of both residential and non-residential elements. If that is right, the non-residential rate table applies to the whole transaction rather than the residential rate table.

Under the Finance Act 2003, non-residential SDLT rates include a 0% band up to £150,000. So where chargeable consideration does not exceed that threshold, the SDLT due can be nil.

Where a taxpayer believes too much SDLT was paid, the usual route is to amend the land transaction return if still within the amendment window, or otherwise to consider an overpayment relief claim if the statutory conditions are met.

Whether property is residential, non-residential or mixed-use is a fact-sensitive question. The legal test depends on the actual subject matter of the transaction at the effective date.

If an argument is based on a dwelling being uninhabitable or not suitable for use as a dwelling, readers should note that the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. A property will not fall outside the residential rules merely because it needs repair, modernisation or substantial works. The condition must be serious enough to meet the stricter approach confirmed by the Court of Appeal.

Analysis

The first issue is the purchase of the single property for about £100,000.

If that property was genuinely mixed-use at the effective date of the transaction, the non-residential SDLT rates would normally apply. On a consideration of around £100,000, that would usually produce no SDLT because the 0% non-residential band extends up to £150,000. If residential rates were used instead, the taxpayer may have overpaid.

However, the label “mixed-use” is not enough by itself. The taxpayer would need to show that the property included a real non-residential element at the date of completion. Examples can include commercial premises with living accommodation, land used for non-residential purposes, or a building with both shop and flat elements. The precise facts matter.

The second issue is the transfer of a portfolio from individual ownership to a limited company.

That type of transaction can be more complicated. SDLT may still arise on incorporation transfers, and the chargeable consideration may not simply be the market value in every case. The position can depend on whether debt is assumed by the company, whether partnership rules apply, and what exactly was transferred. But one basic point remains: if any of the transferred properties were commercial or mixed-use, they should not automatically have been treated as wholly residential.

That means a property-by-property review is often needed. For each property, the relevant questions include:

• What was transferred?
• What was the SDLT value or consideration used?
• Was the property wholly residential, wholly commercial, or mixed-use?
• What was its actual physical and legal character at the effective date?

If a portfolio was assessed on the wrong basis, the total SDLT may have been overstated.

It is also important not to confuse a mixed-use argument with an uninhabitable dwelling argument. They are different routes. A property may still be residential even if it is in poor condition. Since Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the courts have confirmed that the bar for saying a dwelling is not suitable for use as a dwelling is relatively high.

Outcome

The practical conclusion is that an SDLT reclaim may be available if:

• the single property purchase was in fact mixed-use and was wrongly taxed as residential, or
• one or more properties in the portfolio transfer were commercial or mixed-use and the SDLT calculation treated them incorrectly.

On the figures described, the single purchase appears to be the clearer point. If it was truly mixed-use and the price was around £100,000, the SDLT due may have been nil under the non-residential rates.

The portfolio transfer also may justify a reclaim, but that would usually require a more detailed review of each property and the structure of the transfer.

Practical Steps

To assess the position properly, a taxpayer should gather the following for each transaction:

• the SDLT return submitted to HMRC
• the SDLT5 certificate, if available
• the completion statement
• the transfer deed or purchase contract
• valuation details used for SDLT
• photographs, plans, title documents and particulars showing the property’s character at the effective date
• evidence of any commercial element or non-residential use

For a portfolio case, it is sensible to prepare a schedule listing each property, the SDLT paid, the value used, and whether it was residential, commercial or mixed-use.

The taxpayer should then check whether the claim is still within the time limits for amendment or overpayment relief. Time limits are strict, so this should be done promptly.

If any part of the argument depends on the property being uninhabitable, the evidence needs to be particularly strong in light of Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. Ordinary disrepair or renovation needs will usually not be enough on their own.

Conclusion

Yes, overpaid SDLT may be reclaimable where a property or portfolio was wrongly treated as wholly residential instead of mixed-use or non-residential. The key is the true nature of the property at the effective date and the basis on which SDLT was calculated. A single mixed-use purchase below £150,000 may attract no SDLT at all under the non-residential rates, while a portfolio transfer needs a careful property-by-property review.

Legal References Used

• Finance Act 2003
• Stamp Duty Land Tax provisions on residential and non-residential property under the 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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