Stamp Duty refunds / uninhabitable second homes.

jonnyukbravo

We recently bought a second home as an investment. As we worked on it we uncovered a whole list of nasties. We have heard that the stamp duty on such houses might qualify for a refund in dine cases. Does anyone know the procedure for this?

jonnyukbravo

… should read “ in such cases” …

p00hsticks

jonnyukbravo said:

We recently bought a second home as an investment. As we worked on it we uncovered a whole list of nasties. We have heard that the stamp duty on such houses might qualify for a refund in dine cases. Does anyone know the procedure for this?

If you only noticed this 'list of nasties' after you've actually bought the place, then as I understand it you almost certainly aren't going to qualify.

The SDLT exemption is for 'uninhabitable properties' - generally ones that are completely derelict and would have to be effectively rebuilt.

If you heard about this via a cold call from a company who found you by checking the land registry then you are in danger of being scammed

https://www.gov.uk/government/news/new-homeowners-warned-over-tax-refund-claims

_Penny_Dreadful

jonnyukbravo said:

We recently bought a second home as an investment. As we worked on it we uncovered a whole list of nasties. We have heard that the stamp duty on such houses might qualify for a refund in dine cases. Does anyone know the procedure for this?

I can't say it's something I've heard of before.  The higher rates of SDLT apply to a purchase when all 4 conditions are met...

SDLTM09765 - SDLT - higher rates for additional dwellings: Individuals – summary of Conditions - purchase of a single dwelling - Para 3(1) Sch 4ZA FA2003

A purchase of a major interest in a single dwelling by an individual will be a “higher rates transaction” and the higher rates of SDLT will apply to the purchase, if at the end of the day of purchase each of conditions A to D are met.

• Condition A - the chargeable consideration is £40,000 or more

• Condition B - the major interest purchased is not subject to a lease which has more than 21 years to run on the date of purchase

• Condition C - the purchaser owns a major interest (with a market value of £40,000 or more) in another dwelling which is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling, and
• Condition D - the dwelling being purchased is not replacing the purchaser’s only or main residence.

Did the purchase meet all of the above conditions?  Is your argument that because of the, "nasties," you haven't purchased a dwelling?

SDLTM00372 - Scope: what is chargeable: land transactions: Residential Property– Dwellings

“Dwelling” takes its everyday meaning: a building, or a part of a building that affords those who use it the facilities required for day-to-day private domestic existence and a sufficient degree of permanence.

The meaning of “dwelling” also includes buildings under construction where it can be evidenced that they are being built or adapted for use as a dwelling.

In most cases, there should be little difficulty in deciding whether or not particular premises are a dwelling. However, in more complex circumstances, it may be necessary to weigh up all the relevant factors to come to a balanced judgement.

SDLT_Geek

jonnyukbravo said:

We recently bought a second home as an investment. As we worked on it we uncovered a whole list of nasties. We have heard that the stamp duty on such houses might qualify for a refund in dine cases. Does anyone know the procedure for this?

You might also want to look at:

the Law Society feature here https://www.lawsociety.org.uk/topics/property/companies-encouraging-buyers-to-make-unfounded-claims-for-sdlt-refunds

the CIOT piece https://www.tax.org.uk/stamp-duty-refunds-too-good-to-be-true

and the note on Patrick Cannon's website: https://www.patrickcannon.net/news/stamp-duty-refunds-too-good-to-be-true/

user1977

p00hsticks said:

jonnyukbravo said:

We recently bought a second home as an investment. As we worked on it we uncovered a whole list of nasties. We have heard that the stamp duty on such houses might qualify for a refund in dine cases. Does anyone know the procedure for this?

If you only noticed this 'list of nasties' after you've actually bought the place, then as I understand it you almost certainly aren't going to qualify.

The SDLT exemption is for 'uninhabitable properties' - generally ones that are completely derelict and would have to be effectively rebuilt.

If you heard about this via a cold call from a company who found you by checking the land registry then you are in danger of being scammed

https://www.gov.uk/government/news/new-homeowners-warned-over-tax-refund-claims

And for the avoidance of doubt, note than "uninhabitable" means something much more serious than the borderline for mortgage lending purposes, where merely e.g. lacking a kitchen sink makes something "uninhabitable".