SDLT and Uninhabitable Properties

If you are considering buying a property that you consider to be uninhabitable, it's important that HMRC agree with you the team at Cap Ex Tax can help make sure you get it correct.

Stamp Duty Land Tax and Uninhabitable Properties

Are you considering buying a property that is uninhabitable? If so, you need to be aware of the potential implications on your tax bill. In this blog post, we will take a look at SDLT and what makes an uninhabitable property.

What makes a property uninhabitable?

There are a number of factors that can make a property uninhabitable, such as significant structural damage, mould growth, or a lack of running water.

In some cases, it may simply be that the property does not meet minimum standards for habitability, such as having no heat, electricity or not having facilities such as a kitchen or bathroom.

If a property is found to be uninhabitable, it can be very difficult to sell, as potential buyers will be put off by the thought of having to make significant repairs. As a result, Stamp Duty Land Tax may be waived in order to make the sale more attractive.

What SDLT applies to uninhabitable property?

Stamp Duty Land Tax (SDLT) applies to uninhabitable property that is purchased in England and Northern Ireland. The tax is levied on the total value of the property, including any Stamp Duty that may be due.

In order to qualify as uninhabitable, the property must be unfit for human habitation at the time of purchase. 

When purchasing a second property a 3% surcharge usually applies. If the house is deemed uninhabitable by HMRC then this surcharge is typically waived. 

Each case is judged separately and so legal advice is strongly advised before making a purchase.

Already purchased a property?

If you have already purchased a property that was uninhabitable at the time of purchase you may be eligible for a tax refund. You will require proof from the time of purchase as to the state of the property such as dated photographs.

The expert team here at Cap Ex Tax will happily help you through the process so get in touch today..

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