Can you claim an SDLT refund just because a buy-to-let was bought through a limited company?

Introduction

A common question is whether Stamp Duty Land Tax (SDLT) can be reclaimed when a residential property was bought through a limited company for buy-to-let. Many people assume that buying through a company makes the purchase “commercial” and therefore taxed differently. In most cases, that is not correct.

The key issue is not who bought the property, but what was actually bought. A company can buy a dwelling, and if it buys a dwelling, the residential SDLT rules usually still apply. A refund is only likely if the original SDLT treatment was wrong, for example because the property was genuinely mixed-use, non-residential, or not suitable for use as a dwelling at the effective date of transaction.

The Question

A buyer asked whether they might be entitled to an SDLT refund after purchasing a residential property through a limited company as a buy-to-let investment. They also asked whether a separate property, bought personally in very poor condition, might qualify for a refund on the basis that it was old or run down.

Nick’s Explanation

Nick’s core point was straightforward: buying a residential property through a limited company does not by itself make the property commercial.

In anonymised form, his explanation was:

“If a residential property is purchased through a limited company, it is still regarded as a dwelling under the Finance Act 2003. The only circumstance in which it can be classified as commercial is if there are non-residential elements, such as a shop with flats above, or if it is mixed-use, for example a house with agricultural land.”

That is the correct starting point. The legal test focuses on the nature of the property, not the buyer’s ownership structure or investment purpose.

The follow-up point on the second property was also important. A property being “very old” or in poor condition does not automatically mean it was not suitable for use as a dwelling. The threshold for an uninhabitable claim is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

The Law

SDLT is charged under the Finance Act 2003. Whether residential or non-residential rates apply depends mainly on whether the subject matter of the transaction includes a “dwelling” and whether any non-residential land or property forms part of the purchase.

For SDLT purposes:

• a dwelling is broadly a building that is used or suitable for use as a single dwelling, or is in the process of being constructed or adapted for that use;
• residential property includes land that forms part of the garden or grounds of a dwelling;
• non-residential or mixed-use treatment may apply where the transaction includes land or buildings that are not residential in character.

A company buying a dwelling does not convert that dwelling into non-residential property. A buy-to-let use also does not make it commercial for SDLT rate purposes. It remains residential property unless the facts show otherwise.

Where a taxpayer argues that a building was not suitable for use as a dwelling at completion, the question is one of fact and degree. The courts have made clear that the bar is not low. Serious defects may be needed before a property stops being a dwelling for SDLT purposes. In an uninhabitable or not suitable for use case, the condition thresholds are now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Analysis

Step 1: identify the type of property bought.

If the purchase was of an ordinary house or flat, it will usually be a dwelling. That remains true even if the buyer was a limited company and even if the property was intended for letting.

Step 2: ask whether there was any non-residential element.

A refund may be possible if the transaction was wrongly treated as wholly residential when it was actually mixed-use or non-residential. Examples can include:

• a shop with living accommodation above;
• a property bought with land used for a genuine non-residential purpose;
• premises that were not a dwelling at all at the effective date.

But a standard buy-to-let house owned by a company is not mixed-use simply because it is an investment.

Step 3: consider whether the property was unsuitable for use as a dwelling.

This is where some buyers think a refund may exist if the property needed renovation. However, disrepair, age, dated condition, missing fixtures, or a need for modernisation will not necessarily take a property outside the definition of a dwelling.

Following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799, the courts have confirmed that the threshold is relatively demanding. The fact that works were planned, or even substantial works were needed, does not by itself mean the property was not suitable for use as a dwelling on completion.

Step 4: compare the facts with the SDLT return originally filed.

If the return treated the property as residential and the property was an ordinary dwelling with no non-residential element, that treatment was likely correct. In that situation there is usually no basis for a refund.

Step 5: consider timing.

If there were valid grounds for overpayment, an amendment or repayment claim would also need to be made within the applicable statutory time limits. The exact route depends on the circumstances and how the original return was submitted.

Outcome

The practical answer is that buying a buy-to-let through a limited company does not, on its own, create SDLT refund grounds. It does not make the property “commercial” for SDLT purposes.

A refund is only likely if:

• the purchase was actually mixed-use or non-residential;
• the property was genuinely not suitable for use as a dwelling at the effective date, applying the now relatively high threshold;
• or the SDLT return otherwise contained an error.

On the limited company point alone, the answer is no.

Practical Steps

If you want to assess whether an SDLT refund may exist, work through the following:

1. Check the SDLT return and completion statement to confirm what treatment was used.
2. Review what was included in the purchase: just a house or flat, or also shops, offices, agricultural land, commercial yards, or other non-residential features.
3. If relying on poor condition, gather evidence of the property’s state at completion, such as survey reports, photographs, contractor reports, mortgage valuation comments, and utility or safety issues.
4. Test that evidence against the current legal standard, bearing in mind that the threshold for proving a property was not suitable for use as a dwelling is now relatively high after Mudan.
5. Check whether the claim is still within the relevant SDLT time limits.
6. If the facts are borderline, obtain specialist advice before submitting a reclaim, because HMRC may challenge weak mixed-use or uninhabitable arguments.

Conclusion

A residential property bought through a limited company for buy-to-let is still usually residential property for SDLT. That alone does not make it commercial and does not by itself justify a refund. A reclaim normally depends on something more: a genuine mixed-use element, a true non-residential classification, or very serious condition issues meeting the high legal threshold.

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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