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Thousands of buy to let investors may be due stamp duty rebates - claim

Landlords have been urged to seek advice about potential stamp duty rebates on ‘uninhabitable’ second properties after a landmark tribunal case.

A recent case - involving P N Bewley Ltd and HMRC - has suggested that properties that are not immediately habitable at the time of completion do not constitute a “dwelling” for the purpose of the Finance Act 2003.

And according to a legal firm, Primas Law, this finding could have major implications for the UK housing market. That’s because the decision means that P N Bewley is not liable to pay the additional three per cent stamp duty surcharge applicable to second properties.


It could mean that those who have paid stamp duty on similar uninhabitable properties – including potentially thousands of UK landlords and developers – may have paid an inappropriate level of tax and could seek to reclaim them.

As a result of the outcome of this case, Primas Law says it is being instructed to act for a large and growing number of landlords and developers seeking to recover stamp duty paid for properties that, potentially, should not have attracted the additional tax.

Daniel Thomas, head of litigation at Primas Law, says: “To provide more context to this particular case, the property that P N Bewley purchased was a bungalow and a plot of land in Western-super-Mare. The company’s intention was to demolish the bungalow and build a new dwelling on the land with planning permission already being granted. The bungalow was essentially a derelict building that had been unoccupied for around three years.

“The tribunal was provided with photographs of the derelict building and these demonstrated the heating system, radiators, floorboards and pipework had been removed, and that the property – both internally and externally – was in a very poor condition.

“It was also provided with reports from surveyors that concluded asbestos was present in the property and urgently needed removing.”

On presentation of P N Bewley’s evidence, the tribunal concluded there was “no doubt a passing tramp or group of squatters could have lived in the bungalow… we have no hesitation that, in this case, the bungalow was not suitable for use as a dwelling.”

As a result of this, P N Bewley was not required to pay the SDLT surcharge in this instance.

“This case highlights the importance of developers, estate agents and conveyancers fully understanding the condition of a property, and what potential benefits this offers to a purchaser” adds Thomas.

“It also highlights that developers and landlords who have potentially paid an inappropriate level of tax may be able seek to reclaim the same, if similar circumstances permit.

“It’s a real landmark case for UK property developers and landlords and adds an interesting new dynamic to the debate. We’re currently acting on behalf of a number of property developers and landlords to help them better understand the risks and opportunities, and we think many more will also be looking into these findings in much more detail. For some, it could be significant.”

  • jeremy clarke

    What also needs to change is local council attitudes. We are paying full council tax with no reduction at all whilst we refurbish a flat. 2 months without water/WC yet Bournemouth council consider it fully habitable. Irony is that it was occupied by a single tenant before we bought it and the tenant got a 25% reduction for single occupancy! Where's the logic?

    S l
    • S l
    • 18 June 2019 21:59 PM

    count your lucky stars its 100%, BANES in Avon Somerset are charging 150% and refused single occupancy where there is one and also refused exemption for child whose parents got the flat for her to stay claim its council tax avoidance

  • icon

    No logic and ask the council bod to explain and he cant ask for his boss and get him her to explain they cant. Being saying it for last couple of years Councils are Council Tax thieves. They need to be taken to court but needs a mas of professional LLs to be able to do it.
    How can you be charged 100% for nothing yet get a 25 % reduction because your one person.
    We all need to bill the council for nothing and charge them 100%.
    Start at £100 for doing nothing. And if you dont pay council i will issue a court summons. Stupid isn't it.?

    S l
    • S l
    • 18 June 2019 22:00 PM

    even when council staff had attended to prove occupier stayed in property, they still take to court to sue for 150% empty property in BANES. How's that to top the chart amongst council in UK

  • icon
    • 19 June 2019 00:43 AM

    Never have I ever heard of a council checking a property to ascertain whether occupied by a single occupier.
    Even when properties have been vacant there has always been a single person occupying.
    Doesn't have to be a tenant.
    Just any old name will do.
    Soon as the property is ready then the single person vacates and a new tenant moves in.
    Never have I paid full Council tax!!

  • Nick Sandy

    BANES even tried charging us rates on a house that we were in the process of demolishing saying it was habitable and the officer stated in her report that she had entered the building and confirmed it was habitable. She had not been in the building due to H&S as the building was being demolished, appalling behaviour.

  • icon
    • 13 July 2019 10:16 AM

    Councils used to behave fairly reasonably.
    But being so cash-strapped they realised they could hit LL with continuous Council Tax irrespective of occupation status.
    It is in the nature of the PRS that there will be many periods when a letting property ISN'T being occupied.
    Councils know that hitting LL will not be significantly electorally damaging so have decided to hit the LL as much as they can.
    There doesn't seem to be any recognition that by penalising LL it disincentivises those LL from bringing new supply to the market.
    Surely councils want more rental supply!?
    Councils used to have commonsense council tax policies.
    No longer!!!


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