Possible Rebates Due on Buy to Let Property Investment

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There could be stamp duty rebates due on thousands of buy to let property investments following a landmark court case.

The stamp duty rebates may be possible if the property bought was not immediately habitable at the time of purchase.

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.

The court decision meant that P N Bewley was not liable to pay the additional three per cent stamp duty surcharge applicable to second properties.

It therefore should mean that buy to let landlords who purchased similar uninhabitable properties and paid the extra three per cent stamp duty on them could be due rebates as the extra tax was not applicable.

Law company Primas Law has confirmed that it is being instructed to act for a large and growing number of landlords and developers seeking rebates on stamp duty paid for properties that, potentially, should not have attracted the additional tax.

Head of litigation at Primas Law, Daniel Thomas, said: ‘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.’

Mr Thomas said that the case highlights that developers and landlords who have potentially paid an inappropriate level of tax may be able seek rebates, if similar circumstances permit.

He concluded: ‘It’s a real landmark case for UK property developers and landlords and adds an interesting new dynamic to the debate.’

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