51茶馆

A very high proportion of the SDLT repayment claims that HMRC receives in relation to this area are wrong. Customers should be cautious听about being misled by repayment agents into making incorrect claims.

Whether a property has deteriorated or been damaged to the extent that it no longer comprises a dwelling is a question of fact听and听will only apply to a small minority of buildings.

If the building was used as a dwelling at some point previously, it is fundamentally capable of being so used again (assuming there is no lack of structural or other physical integrity preventing such use). Such a building is likely to be considered 鈥渟uitable for use as a dwelling鈥�,听even if not ready for immediate occupation at the听time听of听the听land听transaction.听

A property might not be considered 鈥渟uitable for use鈥� as a dwelling (sometimes referred to as uninhabitable)听when听any听required听repair听or renovation works mean that the property听no longer has the fundamental characteristics of听a dwelling.听听

There is a clear distinction between a derelict property and a dwelling that is听in need of modernisation, renovation or repair, which can be completed without first addressing structural defects that would make the property dangerous to work on and/or live in.

Examples of repairs, renovations and issues that will not make a property unsuitable for use as a dwelling include, but are not limited to:

路听听听听听听 The temporary removal of bathroom or kitchen facilities before sale.

路听听听听听听 Substantial repairs required to windows, floors, or a roof.

路听听听听听听 Replacement boiler and pipework.

路听听听听听听 Unsafe electrical wiring.

路听听听听听听 The need to switch services back on.

路听听听听听听 An infestation of pests.

路听听听听听听 Damp proofing required or plasterboard damage.

路听听听听听听 Flood damage.

路听 听 听 听Structural defects that can be repaired/rectified.

These are all common issues which can be听fixed and听do not prevent the building from fundamentally still being a dwelling. They听do not constitute鈥痵tructural changes to the dwelling that would mean the building is no longer suitable for use as a dwelling.听

Tribunal Decisions

The Court of Appeal has听considered suitability for use as a dwelling听in the听appeal听of听Amarjeet and Tajinder Mudan [2025] EWCA Civ 799.听This听decision strongly upheld the decision of the Upper Tribunal ([2024] UKUT 307 (TCC))听and confirms HMRC鈥檚 longstanding position, set out above.听

The Court of Appeal found that when considering the definition of residential property, it is necessary to bear in mind what the 鈥渙rdinary speaker of English鈥� would characterise as residential property, that being the 鈥渟ort of property that people live in鈥� and upheld the Upper Tribunals findings that:听

• There should be a focus on the 鈥渇undamental characteristics鈥� and nature of a听building over听a period of time, rather than a snapshot of habitability at the effective date.听Suitable for use as a dwelling does not mean ready for immediate occupation.听听

• Determining听whether or not听a property is suitable for use as a dwelling requires a multi factorial assessment. The extent of repairs / renovation听required听is only one factor.听

• Where a building has previously been used as a dwelling,听that will be听a highly relevant factor.听

• You should assess听the extent to which the building has the fundamental characteristics of a dwelling, including the extent to which it听is structurally sound.听听

• Identify听and assess the impact of the necessary works collectively. Distinguish between works needed to听render听a building habitable, and those to make it pleasant to live in.听

• There should be an assessment听of whether defects in a building require works that are capable听of听remedy,听taking into account听whether those works would be so dangerous or hazardous as to prejudice their viability or听they would prejudice the structural integrity of the building.听听

• The question to consider when repairs / renovations are听required听is whether those works have the result that the building听no longer has the characteristics of a dwelling.听

Several First-tier tribunal decisions have听also听considered the issues here:

路听听听听听Henderson Acquisitions Ltd [2023] UKFTT 739 (TC)

路听听听听听Mudan [2023] UKFTT 317 (TC)

路听听听听听Fish Homes Ltd [2020] UKFTT 180 (TC)

路听听听听听PN Bewley Ltd [2019] UKFTT 65 (TC)