Has a Stamp Duty Surcharge Loophole Been Unlocked?
According to a recent story on the Letting Agent Today website, landlords have been urged to seek advice about potential stamp duty rebates on ‘uninhabitable’ second properties after a landmark tribunal case.
The case – involving P N Bewley Ltd and HMRC – suggested that properties which are not immediately habitable at the time of completion do not constitute a “dwelling” for the purpose of the Finance Act 2003. Legal firm Primas Law has suggested that this finding could have major implications for the UK housing market 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 this.
The implementation of the three per cent stamp duty surcharge has proved to be a major talking point over the past few years within the industry and amongst investors, landlords, even homeowners. This is certainly a noteworthy ruling which will undoubtedly pique the interest of many investors and the legal profession. Exactly how this loophole will affect landlords and the housing market remains to be seen, but this is an interesting precedent to follow.