Can you get a stamp duty refund if a property was uninhabitable when you bought it?

Introduction

Many buyers ask whether they can reclaim Stamp Duty Land Tax (SDLT) after buying a run-down property. The usual argument is that the building was not suitable for use as a dwelling at the effective date of the transaction, so residential SDLT rates should not have applied.

This issue matters because the tax difference can be significant. However, the legal test is strict, and it has become harder to succeed in recent cases. In particular, where a buyer says a property was uninhabitable or not suitable for use, the condition threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

The Question

A buyer asked whether they might be entitled to an SDLT refund for two recently purchased properties. The buyer said both properties were unoccupied and uninhabitable at completion. They referred to surveyor and estate agent reports which identified defects including flooring problems, boiler issues and other structural concerns, and wanted to know whether those facts could support a refund claim.

Nick’s Explanation

Nick’s response focused on the key factual question: why does the buyer believe a refund is due?

He asked for the practical details needed to assess the position, including:

• whether the refund argument was based on the properties being uninhabitable at purchase;
• the purchase price of each property;
• when each property was bought; and
• the supporting evidence showing the condition of the properties at the time of purchase.

Once the buyer explained that both properties were said to be uninhabitable and that reports existed dealing with flooring, heating and structural issues, Nick asked to see the surveys, estate agent reports and any other material showing the condition of the properties.

That approach is legally sensible. SDLT refund claims of this type are evidence-heavy. The question is not simply whether repairs were needed, or whether the properties were empty, but whether each property was truly not suitable for use as a dwelling on the effective date of the transaction.

The Law

SDLT is charged under the Finance Act 2003. Whether property is taxed at residential or non-residential rates depends on the nature of the subject matter at the effective date of the transaction.

For dwellings, the key statutory definition is found in Schedule 4ZA to the Finance Act 2003. Broadly, a building counts as 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, many refund claims argue that a building was not “suitable for use” as a dwelling at completion. If that argument succeeds, the transaction may fall to be taxed on a different basis.

The modern case law shows that this is a demanding test. A property does not stop being a dwelling merely because it is vacant, in poor condition, or in need of modernisation or repair. Serious disrepair may still be insufficient if the building retains the basic character of a dwelling.

The leading recent authority is Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. That decision confirms that the threshold for showing a property was not suitable for use as a dwelling is relatively high. The court made clear that many defects, even expensive ones, will not be enough if the property still has the essential nature of a home.

Analysis

In a case like this, each property must be considered separately. The fact that two properties were bought close together does not itself create a refund right. The legal test applies to each transaction on its own facts.

The analysis usually works in the following stages.

1. Identify the exact completion date

   The relevant question is the condition of the property at the effective date of the transaction, usually completion. Later works do not prove the property was unsuitable at the relevant time.

2. Examine the actual condition at completion

   Evidence such as surveys, photographs, valuation reports, contractor reports, auction particulars and mortgage material may help. But the content matters more than the label. A “survey” is not enough unless it shows defects going to habitability or suitability for use as a dwelling.

3. Separate disrepair from true unsuitability

   Problems with flooring, a defective boiler, damp, outdated kitchens or bathrooms, or even structural concerns do not automatically mean the building was not suitable for use. Many older properties are bought in poor condition but remain dwellings for SDLT purposes.

4. Ask whether the property retained the essential characteristics of a dwelling

   Relevant questions may include whether there was a functioning kitchen, bathroom, water supply, sanitation, electricity, weather-tight structure, safe access, and basic ability to live there. No single factor is always decisive, but the overall picture is critical.

5. Apply the high threshold confirmed by the courts

   Following Mudan, the threshold is relatively high. A buyer must usually show more than inconvenience, poor condition, or the need for substantial expenditure. The defects must be serious enough that the property was not suitable for use as a dwelling at all at the relevant date.

6. Consider whether an amendment or repayment claim is still in time

   If too much SDLT was paid, timing matters. Depending on the circumstances, the route may involve amending the return or making a repayment claim. The applicable time limit must be checked carefully.

On the facts described here, the buyer has some potentially relevant evidence, because there are reports dealing with the condition of each property. But the defects mentioned so far do not by themselves establish that a refund is due. Empty possession does not help on its own. Nor does the fact that repairs were needed.

For example:

• if the only issues were a failed boiler, damaged flooring and general structural repair needs, HMRC may still argue the property remained a dwelling;
• if the reports show the building lacked basic facilities, was unsafe for occupation, or had defects so severe that it could not realistically be lived in at completion, the argument becomes stronger;
• if the evidence is mixed, the claim may be difficult, especially after Mudan.

Outcome

A buyer in this position may be able to explore an SDLT refund claim, but success depends on strong contemporaneous evidence showing that each property was not suitable for use as a dwelling at completion.

On the limited facts provided, no firm conclusion can be reached yet. The reports may support a claim, but defects such as flooring problems, boiler issues and structural repairs do not automatically cross the legal threshold. The threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799.

Practical Steps

If you are assessing a possible SDLT refund on this basis, the sensible next steps are:

• collect the purchase documents for each property, including the SDLT return and completion statement;
• gather all evidence showing condition at completion, such as surveys, photographs, auction packs, valuation reports, mortgage correspondence and contractor assessments;
• check whether the evidence shows true unsuitability for use as a dwelling, rather than ordinary disrepair or renovation need;
• review each property separately, because one may qualify even if the other does not;
• check the relevant time limits for amending the SDLT position or making a repayment claim; and
• compare the facts carefully against the principles in the recent case law, especially Mudan.

Conclusion

You cannot assume that a run-down or empty property qualifies for an SDLT refund. The legal test is whether the property was suitable for use as a dwelling at completion, and that is now a demanding threshold. Evidence is essential, and the strongest claims are those where the property was genuinely incapable of residential use on the relevant date.

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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