Bought a property in the last 4 years that was derelict, unsafe, or had structural problems?
Did it require reconstruction work or demolishing?
If so, you may have overpaid stamp duty.

Was your property derelict when you bought it? If it was in such poor condition that it had lost the basic structure of a home — for example unsafe or collapsing floors, a missing or collapsed roof, unstable walls, or hazardous contamination such as asbestos — then it may not have qualified as a “dwelling” under stamp duty law. These are very different from cases of ordinary disrepair or modernisation (like rewiring, new plumbing, or cosmetic works), which the courts have confirmed remain residential.

Following the Court of Appeal’s decision in Mudan v HMRC [2025], properties that were “not suitable for use as a dwelling” on the day of purchase can fall to be taxed at the lower, non-residential rates — even if they still looked like houses from the outside.

If you paid higher rates of SDLT or bought a property over £1 million (or £600,000 after October 2024) — you could be entitled to a stamp duty refund. This principle also applies under LBTT in Scotland and LTT in Wales.

We are highly selective about the cases we submit to HMRC, as HMRC are actively monitoring both claims and agents for inaccurate or unsubstantiated submissions (see article).

Click to see images of derelict properties.

Property Habitability Checker

Use our quick checker to find out if your property qualifies.

Key Legal Principle (Mudan v HMRC):

The test is whether the property retains its "fundamental characteristics of a dwelling" and has not "lost its identity" as a dwelling. The Court distinguished between:

  • "A desirable house which has become dilapidated" (still residential property)
  • "An empty shell with no main roof" (no longer residential property)

Important: The test is not whether the property was immediately habitable or "ready to move into" but whether it retained its dwelling character despite needing repairs.

Primary Legal Assessment (Based on Mudan v HMRC)
Condition Assessment (Score 1-5 based on severity)
0
  • Score 5: No roof; walls partly fallen; shell only
  • Score 4: Roof open; water ingress widespread; scaffolding present
  • Score 3: Large holes, partial roof collapse; daylight visible
  • Score 2: Small leaks or missing slates; minor holes
  • Score 1: Intact shell; no visible damage
0
  • Score 5: Walls partially collapsed; rebuild needed
  • Score 4: Severe bowing; condemned by engineer
  • Score 3: Major subsidence cracks; engineer props
  • Score 2: Minor sagging or hairline cracks
  • Score 1: Sound structure; no propping
0
  • Score 5: All pipework and wiring removed; no services
  • Score 4: Multiple services disconnected; live wires exposed
  • Score 3: One service capped or red‑tagged appliance
  • Score 2: Intermittent supply; minor disconnections
  • Score 1: All utilities connected and working
0
  • Score 5: Permanent exemption (Class G) or closure order
  • Score 4: Official prohibition on occupation
  • Score 3: Dangerous‑structure notice possible
  • Score 2: Temporary safety warning
  • Score 1: No notices or exemptions
0
  • Score 5: Abandoned for years; severe decay
  • Score 4: Windows smashed; roof trees; vermin evidence
  • Score 3: Vacant 1+ year; vegetation overgrowth
  • Score 2: Vacant months; minor neglect
  • Score 1: Occupied recently; maintained
0
  • Score 5: Widespread rot; vermin infestation
  • Score 4: Extensive black mould; rising damp
  • Score 3: Dry‑rot or beetle damage in sections
  • Score 2: Minor damp patches; occasional mould
  • Score 1: No signs of infestation or damp
0
  • Score 5: Half roof burnt; chemical contamination
  • Score 4: Major fire damage; asbestos flagged
  • Score 3: Charring on timbers; small hazards
  • Score 2: Minor smoke damage or asbestos remnants
  • Score 1: No fire or contamination
0
  • Score 5: Complete conversion; no domestic spaces
  • Score 4: Major non‑residential fit‑out underway
  • Score 3: Half rooms stripped; retail shell
  • Score 2: Minor work; some rooms altered
  • Score 1: Fully residential layout
On the completion date, what was the status of any works?

Why Act Now on Uninhabitable Property Refunds? – Post-Mudan Guidance

Following the Court of Appeal’s decision in Mudan v HMRC [2025] EWCA Civ 799 (27 June 2025), the law is now clear: a property must be truly unsuitable for use as a dwelling at the time of purchase to qualify for non-residential stamp duty rates.

We’ve already handled around 450 claims for uninhabitable properties, so we know exactly what HMRC looks for — and how to get your case right first time.

Why act now?

Jump the queue and get paid faster – With the judgment now issued, we are already submitting qualifying claims. Acting now puts you ahead of the growing backlog of applicants.

Stay ahead of HMRC scrutiny – HMRC is now reviewing claims under the new legal test. Submitting promptly means your case is properly documented, meets the clarified standard, and is less likely to face delays or additional questions.

Don’t miss your deadline – You have just 4 years (5 in Scotland) from the date of completion to reclaim overpaid SDLT, LTT or LBTT. Once that time limit expires, your right to claim is lost permanently. If you’re unsure, we can help you file a placeholder claim to protect your position while you decide whether to proceed.

Final Notes

If your property was derelict or had serious structural or legal issues that made it truly unfit for residential use, you may be able to reclaim thousands in overpaid tax. But cosmetic issues or properties needing renovation alone are not enough.

Our 4-Step Service

  1. Free call – You tell us about the property; we give an honest yes or no.
  2. Evidence pack – RICS report, engineer letter, utilities, and time-stamped photos.
  3. Document gathering – We’ll request the TR1, SDLT5, completion statement, and contract for sale. These are essential to verify your legal interest and filing position.
  4. 48-hour filing – Once we have all documents in order and the judgment supports refund claims, we’ll submit your case to HMRC within two working days.

Fee: 12.5% + VAT of any refund – no win, no fee. If HMRC ever reclaims the refund, we refund our fee too.

Ready to see if you qualify?

Book a quick call today.

Email: Phone: 020 5773 323 | [email protected]

How Legislation and Case Law Work Together

Statute sets the baseline

Stamp Duty Land Tax (SDLT) is defined in the Finance Act 2003. The Act says a purchase is taxed at residential rates if the property is “used or suitable for use as a dwelling.” But it does not explain exactly what “suitable” means.

Case law fills the gaps

When legislation is unclear, the courts interpret it. Higher court rulings—like those from the Upper Tribunal or Court of Appeal—create binding precedents that:

  • Tell HMRC how to apply the law
  • Help taxpayers understand if they qualify for relief
  • Guide lower tribunals in future disputes

The biggest question in recent years has been whether a seriously run-down property can fall outside the definition of a dwelling—and whether that means non-residential stamp duty rates should apply.

The Mudan Case: Why It Matters

Background: In 2024, the Upper Tribunal ruled that a vandalised, unsafe house bought by the Mudans still counted as a dwelling, even though it lacked working services. This effectively blocked many SDLT refund claims based on uninhabitable condition.

Final Verdict: On 27 June 2025, the Court of Appeal confirmed that a building will still be treated as a dwelling unless it has lost its fundamental residential characteristics. That means structural soundness, basic layout, and potential for use still matter — not just the absence of working utilities.

Why it matters: The judgment sets a clear, national standard: only properties that are truly unsuitable for use as dwellings — for example, due to structural collapse, legal prohibition, or total disrepair — qualify for non-residential SDLT.

If your property had no roof, was dangerously unstable, or had no basic services with no safe way to restore them, you may now qualify for a refund. But ordinary renovation projects or homes needing modernisation do not qualify.

The law is now settled — and refund claims can move forward with confidence.

The Mudan Appeal: What It Means for Uninhabitable Property Stamp Duty Claims

Detailed explainer for buyers, investors and professionals. Full analysis here. 

1. Why this case matters

Core question: When is a seriously run-down property not a “dwelling” for Stamp Duty Land Tax (SDLT), Land and Buildings Transaction Tax (LBTT), or Land Transaction Tax (LTT)?

Practical stakes: Residential rates can be up to 3× higher than non-residential rates. Reclassifying a purchase can unlock refunds of £5,000 to £150,000+.

Past roadblock: A 2024 Upper Tribunal decision (Mudan v HMRC) said a house could still be a “dwelling” even with no working services and major safety issues — shutting down most uninhabitable refund claims.

Final ruling: On 27 June 2025, the Court of Appeal overturned that decision. It ruled that a property is not a “dwelling” if it has lost its fundamental suitability for residential use — meaning the law now favours taxpayers in genuine cases of dereliction or danger.

2. Timeline at a glance

DateStageKey takeaway
Aug 2019Mudans complete purchaseSDLT paid at residential rate
Oct 2022First-tier Tribunal (FTT)Rules for taxpayers: “reasonable person would not live here”
Oct 2024Upper Tribunal (UT)HMRC wins: property still a dwelling; refunds blocked
Jun 2025Court of Appeal hearingJudges challenge both sides
27 Jun 2025Final judgment issuedCourt sides with taxpayers in part; refunds allowed for genuinely unsuitable properties

3. What the appeal clarified

The Finance Act 2003 defines a residential property as one “used or suitable for use as a dwelling.” But it didn’t explain what “suitable” meant.

The Court of Appeal confirmed:

  • Suitability is not just about the design of the building.
  • A property must be realistically capable of being lived in at the time of purchase.
  • Properties without roofs, with structural collapse, legal prohibition on occupation, or no working services may fall outside the definition.

This creates a clear test: if a property lacks the fundamental characteristics of a dwelling, it should not be taxed at residential rates.

4. Key findings from the ruling

  • The Court rejected HMRC’s claim that a house is a dwelling based solely on its design or intended use.
  • It agreed that properties in such poor condition that no reasonable person could live there are not “suitable” dwellings.
  • It stressed that suitability must be judged objectively, based on the state of the property at completion.

5. Practical impact

  • Refund claims are now back on the table for buyers of genuinely uninhabitable properties.
  • Cosmetic issues, broken boilers or outdated kitchens still won’t qualify.
  • But if your property had no services, structural instability, or was legally prohibited for use, you may be eligible.

6. Signs your property may qualify

  • No roof or partial collapse
  • No electricity or running water
  • Dangerous-structure or prohibition notice
  • Serious fire/flood damage
  • Engineer-confirmed risk to occupants
  • Probably not enough: missing kitchen, damp, old wiring, general disrepair

7. What to do now

  • Check your completion date – You have 4 years (5 in Scotland) to claim from the date of purchase.
  • Collect your proof – Completion-day photos, RICS report, utilities, council records.
  • File your claim – We can assess, prepare and submit your case to HMRC.

Claim assessment: Free
Fee if successful: 15% (no VAT charged, no win, no fee)

Call 0204 577 3323 or email [email protected] to get started.

Contact Nick Garner About Your Case Today