SDLT Refunds And Failed Boilers: Nick Garner Explains
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Can you reclaim SDLT if the boiler failed and the property had no heating?
Introduction
Buyers sometimes hear that Stamp Duty Land Tax (SDLT) can be reclaimed if a property was not fit to live in when it was bought. A common question is whether serious heating problems, such as a failed boiler and a temporary move into alternative accommodation, are enough to make the dwelling “unsuitable for use” for SDLT purposes.
The short answer is that this is now a difficult argument. A temporary lack of heating caused by a failed boiler, even if inconvenient and expensive, will not usually be enough if the defect was capable of being fixed by repair or replacement. The current legal threshold is relatively high, especially following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.
The Question
A buyer purchased a dwelling for £510,000. Around completion, the oil boiler failed several times, leaving the property without heating. Temporary accommodation was needed for a short period. The boiler could not be repaired because a replacement part was unavailable, so a new boiler was installed a few weeks later.
The buyer wants to know whether those facts could support an SDLT reclaim on the basis that the property was not suitable for use as a dwelling at the effective date of the transaction.
Nick’s Explanation
Nick’s view was that this kind of claim is unlikely to succeed under HMRC’s current approach. In anonymised form, his explanation was:
“HMRC will now only consider cases involving fundamental defects which cannot be repaired. Earlier guidance had been applied more broadly, with some focus on whether a property was too dangerous to live in and needed more than ordinary repair or renovation. That position has narrowed.”
He also indicated that the outcome of the appellate case law was important, because the courts were considering how strict the “unsuitable for use as a dwelling” test should be. That issue has now been clarified by the Court of Appeal in Mudan, and the threshold is high.
The Law
SDLT on residential property is charged under the Finance Act 2003. Whether a property is taxed as residential or non-residential can depend on whether, at the effective date of the transaction, it is a “dwelling” for SDLT purposes.
The key statutory provision is Schedule 4ZA to the Finance Act 2003, which contains the definition of a dwelling for higher rates purposes and is also central to the wider SDLT analysis. Broadly, a building is a dwelling if it is used or suitable for use as a single dwelling, or is in the process of being constructed or adapted for such use.
In practice, disputes arise where a buyer argues that the property was not suitable for use as a dwelling at completion, so that residential SDLT treatment should not have applied in the normal way.
The courts have repeatedly stressed that this is an objective test applied at the effective date of the transaction. The question is not whether the property was comfortable, modern, or immediately convenient to occupy. The question is whether the condition of the property was so serious that it was not suitable for use as a dwelling.
The modern case law has made clear that ordinary disrepair, deferred maintenance, and defects capable of repair will often not be enough. The Court of Appeal in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799 confirmed that the condition threshold in these cases is relatively high.
Analysis
Applying those rules step by step:
The relevant date is the effective date of the purchase, usually completion.
The issue is whether the dwelling was unsuitable for use as a dwelling on that date.
A failed boiler and lack of heating are serious practical problems. They may make occupation unpleasant, costly, or temporarily unrealistic.
However, the fact pattern here points to a defect that was ultimately resolved by replacing the boiler within a few weeks. That strongly suggests the problem was remediable, even if repair of the old unit itself was not possible.
The courts now distinguish between a property with repairable defects and a property with fundamental defects that mean it is not truly suitable for residential use at all.
A temporary absence of heating, by itself, is unlikely to meet that threshold unless it forms part of a much wider picture of severe and fundamental failure in the property.
The need to stay elsewhere for a short time does not automatically decide the SDLT issue. The legal test is objective and property-based, not simply whether the buyer chose, or felt compelled, to live elsewhere temporarily.
The fact that a new boiler could be installed within weeks is likely to be treated as evidence that the defect was capable of being remedied by works of repair or replacement, rather than evidence that the building had ceased to be a dwelling.
Following Mudan, arguments based on temporary uninhabitability now face a much steeper uphill struggle. The present threshold is relatively high, and a heating failure alone will rarely be enough unless the facts are exceptional.
Outcome
On these facts, an SDLT reclaim is unlikely to succeed. A boiler failure, even one that leaves the property without heating for a short period and requires replacement rather than repair, would usually be seen as a remediable defect rather than a fundamental condition making the property unsuitable for use as a dwelling.
In other words, this looks much more like a case of serious but repairable disrepair than a case where the property falls outside the dwelling definition for SDLT purposes.
Practical Steps
If you are assessing a similar case, it is sensible to gather evidence on the condition of the property at completion, including:
- the survey or inspection report
- engineer reports on the heating system
- quotes, invoices, and timelines for repair or replacement
- photographs and other evidence of the property’s condition
- any evidence of wider structural, safety, or utility failures
- the SDLT return and completion documents
The key question is whether the defects were truly fundamental and whether they made the property objectively unsuitable for use as a dwelling at the effective date.
Where the problem is limited to one system, such as heating, hot water, or electrics, and the issue can be put right by ordinary repair or replacement works, the claim is now much less likely to succeed after Mudan.
If the property had multiple severe defects, or if there were hazards going well beyond ordinary disrepair, a more detailed legal review may still be worthwhile.
Conclusion
A failed boiler and temporary lack of heating will not usually justify an SDLT reclaim on the basis that the property was unsuitable for use as a dwelling. After Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the legal threshold is relatively high, and remediable defects are unlikely to be enough.
Legal References Used
- Finance Act 2003
- Finance Act 2003, Schedule 4ZA
- 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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