HMRC have issued a warning to taxpayers to be vigilant of tax agents offering to secure Stamp Duty Land Tax (SDLT) repayments on certain property purchases.
Following the Court of Appeal (CoA) decision in Amarjeet and Tajinder Mudan v HMRC [2025] EWCA Civ 799, HMRC have issued a warning to homebuyers highlighting that properties in need of repair when purchased are chargeable to the residential rates of Stamp Duty Land Tax (SDLT), notwithstanding their condition.
The Mudan case found that a property that was dilapidated and vandalised when it was purchased still constituted residential property, meaning higher rates of SDLT were payable on the purchase.
- The couple who bought the property believed that it was not suitable for use as a residence at the point of purchase and, having paid SDLT at the residential rates, subsequently tried to reclaim 'overpaid' SDLT on the acquisition on the basis that the non-residential rates should have applied.
HMRC have said the Mundan case reinforces their long-standing view on the matter:
- If a property requires repair when it is purchased but retains its fundamental characteristics of a dwelling, it is still suitable for use as a dwelling.
- A key factor for determining suitability is whether the property has previously been used as a dwelling.
Following the decision, HMRC have issued a warning to property buyers to be aware of tax agents claiming that, for a fee, SDLT can be reclaimed on property purchases when they are in need of repair.
HMRC have said:
- Claims of this kind often leave the homeowner liable for the full amount of SDLT plus penalties and interest.
- They are taking action on spurious SDLT repayment claims and will use civil powers to deal with the minority who undermine the tax system.
Useful guides on this topic
SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What garden and grounds are subject to higher rates of SDLT?
SDLT: Amending returns
How do I amend an SDLT return? When can I amend an SDLT return? How do I claim an SDLT refund? How do I deal with contingent consideration?
How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?
SDLT: At a glance, Stamp Duty Land Tax, rates & allowances
What is Stamp Duty Land Tax (SDLT)? What are the rates of Stamp Duty Land Tax (SDLT)?
External link
HMRC press release: Homebuyers warning as HMRC gets tough on bogus Stamp Duty claims