Stamp duty refunds for uninhabitable properties: what to do

By Hiatham Javaid, Senior Litigation Executive 

Stamp duty refunds for uninhabitable properties 

Over the last year, Primas has been supporting a host of property developers and landlords in reclaiming thousands of pounds in overpaid stamp duty on uninhabitable properties.

Following an unprecedented stamp duty land tax case last year, Primas has reclaimed over £100,000 on behalf of its clients since the landmark tribunal.

The case, which opened up some interesting outcomes for property developers and landlords, determined that properties not immediately habitable at the time of completion did not constitute as a “dwelling” and therefore were not liable to pay the additional three percent “second home surcharge”.

As a result, Primas has been instructed to act for a number of landlords and developers to recover stamp duty paid on uninhabitable properties which shouldn’t have attracted the additional tax.

But exactly makes a property uninhabitable in the UK?

Uninhabitable (adjective): a place unsuitable for living in

 There is a host of factors that determine if a property should be defined as uninhabitable which includes:

• Glass in doors, screens, windows, etc, is not toughened or laminated in accordance with current Health and Safety requirements (Building Regulations).
• Flats lacking ‘½ hour fire check’ rated doors where required by Building Regulations.
• All or any staircases not possessing appropriate balustrades or handrails that comply with the Building Regulations and/or are in an unsafe condition.
• A kitchen without a minimum of one work top length of 900mm or a minimum of 300mm of tiling above work surfaces and above the cooker (or suitable alternative).
• A Cooker space sited behind a door so as to become a Health and Safety issue.
• A minimum appliance space for a washing machine and refrigerator, with appropriate plumbing and electrics.
• A refrigerator space sited next to a cooker.
• The presence of asbestos that would cause a direct and immediate Health and Safety risk.
• The presence of any significant subsidence, significant structural movement or structural instability (as demonstrated by a structural engineers report).
• An SFA without a fully working heating system (between September and April) or year round when a vulnerable person is present.
• An SFA without any means to heat water (hot water system).
• An SFA that cannot be made secure. This applies to any external door (including any patio or french doors) and any ground floor window.
• Major internal disruption such as a collapsed ceiling
• Lack of one or more utilities: water, gas (including LPG), electricity.
• Major Health and Safety issue(s) or environmental factor(s) that would cause a direct and immediate risk to the occupants.
• The presence of a significant damp or mould problem likely to cause an immediate health risk to the Occupants.
• A significant hygiene problem with the SFA that poses a Health and Safety issue.
• The presence of a significant roof leak causing water to penetrate into the property.
• The electrical system is in an unsafe condition.
• On move-in, a property which has a coin/token operated gas or electric meter.

If you’ve paid stamp duty on a property that was uninhabitable at the time of completion, our dedicated team at Primas will be able to assess your grounds for a rebate.

With one recent case resulting in a rebate of £19,000, Primas is encouraging landlords and property developers to keep up to date with the late guidance and understand the functionality of their properties when submitting their stamp duty land tax.

If you would like us to consider whether you’re entitled to a stamp duty rebate, or if you’d like to find out what this means your property portfolio, then get in touch using: sdlt.reclaim@primaslaw.co.uk.

Costs and Terms & Conditions
A fixed fee per case will apply. This rate may vary depending on the amount of cases.