Bought a Probate Property and Overpaid SDLT?

You might be eligible for a refund if you paid too much Stamp Duty Land Tax (SDLT) when buying a probate or inherited property, especially if the property was uninhabitable at completion.

Why Probate Sales Can Lead to Overpaid SDLT

Probate properties are often sold “as seen” and may be outdated, derelict, or missing essential living facilities. Conveyancers sometimes apply residential SDLT rates by default, even if the property doesn’t legally qualify as a “dwelling” at the time of purchase.

If the property was uninhabitable when you bought it, lower non-residential SDLT rates could apply. This difference can result in a refund.

Example

If you bought a probate property for £300,000 that:

• Lacked a functioning kitchen or bathroom
• Contained asbestos or needed structural repairs
• Was unfit for immediate occupation

You may have paid £14,000 or more in residential SDLT (including the 3% surcharge), whereas the non-residential SDLT rate might have been closer to £5,000. The difference could be claimable.

Who Might Qualify?

You may be entitled to a refund if:

• You bought the property within the last 4 years
• The property was uninhabitable at completion
• You paid residential SDLT rates, including any surcharges
• You have evidence such as photos, survey reports, or EPCs

If you’re unsure, it’s worth having your case reviewed.

Background on the Rules

The 2019 PN Bewley v HMRC tribunal clarified that uninhabitable properties don’t count as dwellings for SDLT purposes, making it possible to claim refunds where residential rates were incorrectly applied.

Impact of Residency

The process typically includes:

• Reviewing your SDLT return and legal documents
• Assessing the property’s condition at purchase
• Preparing supporting evidence
• Liaising with HMRC on your behalf
• Handling the refund claim through to completion

HMRC requires supporting documents like sale contracts and proof of ownership.

Important: Time Limits

You have 4 years from the completion date to submit an SDLT refund claim. After that, HMRC will not pay a refund, even if you overpaid.

If you bought a probate property and think you may have paid too much SDLT, consider a review to understand your options.