HMRC is warning homebuyers to be on their guard for tax agents offering misleading Stamp Duty Land Tax (SDLT) repayment claims on property purchases.

Following a recent decision by the Court of Appeal, which ruled that residential properties in need of repair remain chargeable to residential rates of Stamp Duty, HMRC is reminding those looking to purchase property to be aware of tax agent scams promising tax repayment claims on properties of this kind.

According to HMRC, these agents are offering, for a fee, to secure SDLT repayments on the homebuyer’s behalf, where repairs are needed to the property they have bought, claiming that the property can be classed as “non residential”.  However, as the Court of Appeal ruling has confirmed, properties needing repairs remain liable for residential rates of SDLT if they retain the fundamental characteristics of a dwelling and were previously used as a home. This applies even if the properties are dilapidated and temporarily uninhabitable.

HMRC is therefore urging homebuyers to be vigilant if approached by a tax agent offering to make these types of repayment claims on their behalf, as not only will the new homeowner pay a fee for the agent’s services, they will also be liable for the full amount of SDLT, plus penalties and interest if the claim is proved to be false.

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Internet link: HMRC press release