Stamp Duty on properties classed as uninhabitable.

Robroy79

Question - my brother and I purchased a property two years ago as a project to renovate and either rent or sell, we ended up renting this.
The property was purchased in an uninhabitable state from auction but we paid the 3% second residential property rate. The property didn't have functioning utilities, had asbestos and some structural issues. We took about 18 months to bring it up to a liveable standard (spending about 70-80k in the process and approximately 1000 man hours each plus trades people for the skilled stuff).

I understand that I maybe able to reclaim the SDLT we paid on the property owing to the fact it was not a liveable standard until we did this work. Does anyone know whether this is correct and how we would go about this?

moneysavinghero

Yes this is correct.
https://jwraccountants.co.uk/stamp-duty-land-tax-on-unihabitable-properties/
You would have to approach HMRC for a refund and provide evidence that the property was uninhabitable when you purchased it.

Robroy79

Thank - we've got photos and invoices from the development and the original auction listing stating it needs significant investment to make "liveable"

wilfred30

There's a difference between 'liveable' and 'uninhabitable' so you might need to check the criteria to confirm that the house you bought definitely fell within the realms of uninhabitable.

stig

It’s covered in some detail here :-

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm00385

You’re too late to amend your SDLT return, so you’ll have to make a claim to overpayment relief on the basis that there was a mistake in your original return, and the property should have been chargeable at the non-residential rate because of its condition and not the residential rate.

there are lots of agents who will do this for you, but they’ll take a big chunk of the repayment, so you might like to look into doing it yourself - it’s not complicated.

Sandownlau

Hello, Robroy79 said:

Question - my brother and I purchased a property two years ago as a project to renovate and either rent or sell, we ended up renting this.
The property was purchased in an uninhabitable state from auction but we paid the 3% second residential property rate. The property didn't have functioning utilities, had asbestos and some structural issues. We took about 18 months to bring it up to a liveable standard (spending about 70-80k in the process and approximately 1000 man hours each plus trades people for the skilled stuff).

I understand that I maybe able to reclaim the SDLT we paid on the property owing to the fact it was not a liveable standard until we did this work. Does anyone know whether this is correct and how we would go about this?

Hello Robroy, did you manage to reclaim the SDLT?  I have the same transaction 3 years ago and a reclaim company approached wants to claim this on my behalf, is this genuine?

thanks 

sheramber

This thread is over 2 years old and Robroy79  hasn't been active online since September 2021