Properties needing repairs still count as homes
HMRC has warned homebuyers about false Stamp Duty Land Tax (SDLT) refund claims, especially those based on the condition of properties. Some tax agents are misleading buyers by suggesting they can reclaim SDLT if the property needs repairs. However, this is not true if the property still qualifies as a dwelling.
Why repair claims can be misleading
A recent Court of Appeal decision confirmed that properties needing repairs still count as residential dwellings. This applies even if the property is temporarily uninhabitable. As long as the building is structurally sound and was previously used as a home, it remains liable for residential SDLT rates.
Despite this, some agents continue to promote repair claims by arguing the property is “non-residential.” These agents often charge high fees and leave buyers responsible for repaying the tax, along with penalties and interest.
A costly example of a false claim
HMRC shared an example to highlight the risks. A buyer purchased a house in London for £1.1 million. His solicitor correctly filed the SDLT return, calculating £53,750 at residential rates. The property needed modernisation and repair.
Later, a repayment agent approached the buyer, claiming he could recover £9,250 due to the repairs. The agent took a 30% fee, and the buyer received £6,475. HMRC then carried out a compliance check and found the property was residential. The buyer had to repay the full £9,250, plus interest and penalties. The agent refused to help.
Avoiding risky repair claims
This case shows that poor condition does not change a property’s classification. Buyers are responsible for the accuracy of any SDLT claim. Invalid repair claims can lead to serious financial consequences.
Get advice before making a claim
We can help you understand whether you qualify for a legitimate SDLT refund. Avoid unnecessary fees and risks by seeking proper guidance before submitting any claim.
