Cornerstoen Tax Group Chairman David Hannah says that the case will fuel debate on the ‘uninhabitable’ definition and that it’s time for HMRC, The Law Society and the Chartered Institute of Taxation to stop releasing propaganda deterring legitimate claims.
Cornerstone Tax has successfully appealed against a stamp duty claim against HMRC after it pulled the tax collector up over ‘uninhabitable status’ saving its client £168,000.
The stamp duty experts’ client acquired a property in a dilapidated state at completion, requiring a complete renovation both internally and externally.
At the time they claimed ‘uninhabitable status’ and provided clear evidence to highlight that the property was suffering from numerous serious defects as well as hazards on the effective date of the transaction which made it too dangerous to live there.
Amongst a host of defects not only did the property have severe damp and toxic mould issues throughout the property water damage had also destroyed internal partition walls. Missing banisters and stair rods created other safety risks and faulty wiring that needed to be replaced throughout the property.
Ceilings were being propped up using acro-props to maintain the structural integrity of the building and asbestos was found in eight locations at the property with the material score ranging between 2 to the maximum score level of 12 in once instance.
Financing was also an issue with high street lenders and private banks not willing to lend against the property while the valuation report provided to the specialist lender stated that the property was at ‘the stage where it is not suitable for habitation’.
HMRC objected to the claim and the matter went to appeal but earlier this month the case was heard and decided in the appellants favour at the First-tier Tribunal (FTT) on 13 June 2024.
David Hannah (main picture), Group Chairman of Cornerstone Tax, says the case highlights the ongoing debate for what constitutes as ‘uninhabitable’ in matters concerning stamp duty and that the likes of HMRC, The Law Society and the Chartered Institute of Taxation should stop putting out propaganda deterring legitimate claims.
RATE CUTS
And he reckons reforms to Stamp Duty thresholds as opposed to looking at rate cuts would be essential in getting the bottom end of the housing market moving in the long-term.
He says: “SDLT payment bands have been long overdue for an overhaul as they have never been index-linked to house price inflation. An increase to these thresholds would stimulate activity at the lower end of the property market and allow first-time buyers to reduce the amount they need to borrow, thus improving their affordability calculations.
“As we all know, a rising tide lifts all boats, those looking to purchase properties on the mid-to-high end of the property market will now have a chance to sell their low-end properties as a result of the increase in demand from prospective buyers, contributing to further momentum within the housing market.”
