Homebuyers are being warned to steer clear of rogue agents offering to secure Stamp Duty Land Tax (SDLT) repayments on the basis that a property requires repairs. A recent Court of Appeal decision in Mudan & Anor v HMRC has confirmed that properties in need of repair are still chargeable at the residential rates of SDLT.

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This ruling upholds HMRC’s long-standing position: if a property has the fundamental characteristics of a dwelling, it is suitable for use as one—even if repairs or renovations are required.

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Why This Matters for Homebuyers

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Some agents advertise that, for a fee, they can reclaim SDLT by arguing that a property is “non-residential” because it is uninhabitable. However, such claims are often invalid and can leave homeowners facing:

• Liability for the full SDLT originally due
• Additional penalties and interest
• Agents refusing to cover these costs or even ceasing contact altogether

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In practice, this means that relying on aggressive claims by repayment agents can leave buyers financially worse off than before.

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A Real-World Example

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In one reported case, a homeowner was persuaded to claim a refund of £9,250 on the basis that their property, requiring a new boiler and rewiring, was “non-residential.” After paying a 30% agent fee, they received only £6,475. When HMRC later reviewed the claim and ruled the property was residential, the homeowner had to repay the full £9,250 plus penalties and interest—with no help from the agent who made the claim.

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What the Court Decided

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The Court of Appeal confirmed that:

• A property does not need to be ready for immediate occupation to be “suitable for use as a dwelling.”
• The key question is whether the building retains the fundamental characteristics of a dwelling.
• Previous use as a dwelling is an important factor in deciding if it is residential.

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Don’t Rely on HMRC’s Manuals Alone

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HMRC guidance is detailed and highly technical. While the government warns taxpayers to review its manuals, the safest course of action is to seek expert advice before making or disputing any SDLT claim. SDLT is a self-assessed tax, which means the responsibility—and the risk—ultimately rests with the taxpayer.

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Our Advice

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If you are approached by an agent offering to reclaim SDLT on the basis that your property needed repairs, proceed with extreme caution. Many of these claims are unfounded and could cost you far more in the long run.

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For reassurance and clarity, speak to us before making any SDLT repayment claim. We can help you determine whether a claim is genuinely valid and guide you through the process safely.

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