SDLT on a purchase of uninhabitable main home

chrisoskis

Hi, I bought an uninhabitable property back in 2017. The SDLT was over £7k . Some 5 years later we find out that this was not payable on the property due to its poor state of repair. We tried to get a few mortgages but no one would touch it. So we had to pay cash. This was our main residence and despite the condition we moved straight in. It was shortly after a test case so HMRC should have been aware that this was not payable on the listed, derelict property. I’m no solicitor or property professional so would have no clue about this. Why are HMRC able to keep hold of this not insignificant amount. Has anyone else missed? What did you do? To get it refunded instead of using these reclaim companies. 

user1977

chrisoskis said:

HMRC should have been aware that this was not payable on the listed, derelict property. 

How would HMRC have been aware? SDLT is self-assessed, if you think you qualify for relief then it's up to you to fill in the return appropriately.

chrisoskis

I don’t know how HMRC would or would not know. Other than their calculator my solicitor would have used . Will apply for it. Cheers. Even though I maybe out of time. Which is my point here really. If it’s overpaid in error then there should be no timescale to reclaim it. They say on line it’s upto 4 years. It’s now 6 sadly. 

SDLT_Geek

chrisoskis said:

Hi, I bought an uninhabitable property back in 2017. The SDLT was over £7k . Some 5 years later we find out that this was not payable on the property due to its poor state of repair. We tried to get a few mortgages but no one would touch it. So we had to pay cash. This was our main residence and despite the condition we moved straight in. It was shortly after a test case so HMRC should have been aware that this was not payable on the listed, derelict property. I’m no solicitor or property professional so would have no clue about this. Why are HMRC able to keep hold of this not insignificant amount. Has anyone else missed? What did you do? To get it refunded instead of using these reclaim companies. 

You seem to have bought “residential property”.  The fact that you moved into it is pretty conclusive.  You are well out of time to reclaim SDLT anyway.  I suggest that you give this one up!
For reclaim companies you might want to read this: https://www.tax.org.uk/stamp-duty-refunds-too-good-to-be-true

user1977

Yes, "uninhabitable" from the point of view of mortgage lenders is a much lighter test than "so uninhabitable it doesn't even count as a house" for SDLT standards.

macman

Difficult to argue that it was 'uninhabitable' if you moved straight in?

sheramber

Uninhabitable Dwelling

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

user1977

sheramber said:

Uninhabitable Dwelling

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

I'm impressed that someone has considered "too radioactive to live in" as a likely scenario which might come up...(look forward to the tax savings to be made in property purchases after nuclear armageddon!).

loubel

As has been said above, if you moved in then it was clearly habitable, hence your solicitor did not suggest claiming relief.