Can you still claim an SDLT refund for an uninhabitable property bought in 2019?

Introduction

Many buyers ask whether they can reclaim Stamp Duty Land Tax (SDLT) if the property they bought needed major renovation and was not fit to live in at the time of purchase. This usually comes up where a dwelling was in very poor condition, required extensive works, or was bought with a view to full refurbishment or extension.

Two issues usually matter most. First, whether any claim is still within HMRC’s time limit. Second, whether the property was genuinely unsuitable for use as a dwelling under the current legal test. Both points are now difficult in many cases.

The Question

A buyer purchased a residential property in 2019. At the time of purchase, the property needed full internal renovation and planned extension works. The buyer wants to know whether they can now make an SDLT reclaim on the basis that the property was uninhabitable or not suitable for use as a dwelling when it was bought.

Nick’s Explanation

Nick’s answer was short and direct. He explained that a claim of this kind normally has to be made within four years of the effective date of the transaction, so a purchase in 2019 is likely to be out of time.

He also noted that claims based on a property being uninhabitable are now much harder to succeed with. In anonymised form, his point was:

“It is only possible to make a claim within four years of purchasing the property, so a 2019 purchase appears to be out of time. In any event, claims for uninhabitable properties are very difficult now.”

That reflects the current state of the law. Even where a property needed significant works, that does not automatically mean it was not suitable for use as a dwelling for SDLT purposes.

The Law

SDLT is charged under the Finance Act 2003. The key issue in these cases is whether, at the effective date of the transaction, the property was “residential property” and in particular whether a building was “used or suitable for use as a dwelling”.

The main statutory framework is found in the Finance Act 2003, including:

• section 55, which deals with the amount of SDLT chargeable
• section 76, which concerns the effective date of a transaction
• Schedule 4ZA, which contains higher rates rules for additional dwellings
• the statutory definition of residential property in section 116

Where a taxpayer says a building was not suitable for use as a dwelling, the question is judged at the effective date of the transaction. The test is objective. It is not enough that the buyer intended to renovate, or that the property was unattractive, dated, or in disrepair.

There is also a separate procedural issue. An amendment or repayment claim must generally be made within the statutory time limit. In practice, for these SDLT reclaim cases, the relevant window is generally four years from the effective date of the transaction.

As to condition, the threshold for saying a property 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.

Analysis

The position can be analysed in two steps.

First, timing. If the purchase took place in 2019, the normal four-year period for making an SDLT repayment claim has, in most cases, already expired. That is usually enough to end the matter. Once the statutory deadline has passed, HMRC will normally reject the claim regardless of the merits.

Second, the substance of the argument. Even if the claim were still in time, the buyer would still need to show that the property was not suitable for use as a dwelling at completion. That is a demanding test.

Needing “full renovation” does not by itself prove unsuitability. Many properties are bought in poor condition but still count as dwellings for SDLT. The courts and tribunals have repeatedly distinguished between:

• a property that is run-down, dated, neglected, or in need of repair, and
• a property that has deteriorated so far that it is not suitable for use as a dwelling at all

Examples that may help a taxpayer are serious structural failure, the absence of basic facilities combined with wider severe defects, or conditions making occupation unrealistic as a matter of objective fact at the effective date. But the current threshold is high, and ordinary renovation projects often do not meet it.

The Court of Appeal’s decision in Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799 reinforces that point. The modern approach is stricter than many buyers expect. A property can be unpleasant, dilapidated, or require major expenditure and still remain suitable for use as a dwelling for SDLT purposes.

So in a 2019 purchase case involving a property that needed major internal works and an extension, there are two major obstacles:

• the claim is likely to be out of time
• the factual threshold for proving unsuitability is now relatively high

Outcome

The practical answer is that a buyer who purchased in 2019 is unlikely to be able to make a successful SDLT reclaim now on the basis that the property was uninhabitable.

The most immediate reason is the four-year time limit. Even if that hurdle did not exist, a claim based only on the fact that the property needed full renovation would now be difficult to win. Following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the condition threshold is relatively high.

Practical Steps

If you are assessing a similar case, the sensible steps are:

• check the exact effective date of the transaction, usually the completion date
• work out whether four years have already passed
• gather the contemporaneous evidence of condition at the purchase date, such as survey reports, photographs, mortgage valuation material, contractor reports and legal correspondence
• separate evidence of genuine unsuitability from evidence that the property simply needed improvement or modernisation
• review the SDLT return originally filed and identify what relief or treatment is now being argued
• compare the facts carefully against the current case law, especially the stricter approach confirmed in Mudan

Where the purchase is already outside the four-year period, the timing issue will usually be decisive.

Conclusion

A property bought in 2019 is usually too old for an SDLT reclaim based on uninhabitability. In any event, the legal test for showing that a property was not suitable for use as a dwelling is now demanding, and major renovation needs alone will often not be enough.

Legal References Used

• Finance Act 2003
• Finance Act 2003, section 55
• Finance Act 2003, section 76
• Finance Act 2003, section 116
• 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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