Rat-infested property is “suitable for use as a dwelling”
The First-tier Tribunal has found that a property in disrepair, inhabited by rodents, is still suitable for use as a dwelling for tax purposes. This sounds illogical - so what’s the full story?

In Mudan & Anor v HMRC the taxpayers (the Ms) purchased a £1.7m property in London that had been empty for five months after the previous tenants were evicted. During that time, the property had been broken into and vandalised, none of the utilities worked and mice and rat droppings covered the kitchen. The boiler had been ripped off the wall, the gas, electricity and water were not functioning safely and rainwater was leaking into the property. It took nine months of renovations before the Ms moved into the property.
Higher rates of stamp duty land tax (SDLT) are chargeable on residential properties, with the pertinent part of the definition being that the property is residential if it is “suitable for use as a dwelling”. Due to the state of the property, the Ms argued that it was not suitable to be occupied and so lower rates of SDLT should apply. HMRC, and ultimately, the tribunal disagreed. The judge confirmed that the bar for a property not to be suitable for use as a dwelling was set very high, and that a building which was recently used as a dwelling, has not in the interim been adapted for another use, and is capable of being so used again will count as a dwelling for SDLT purposes. An additional £100,000 SDLT was due on the purchase, and the appeal was dismissed.
Related Topics
-
How much will you save with reduced scale charges?
HMRC has reduced the VAT fuel scale charge by nearly 6% for company-provided cars. When does the new reduced rate take effect and how do you make the calculations?
-
Avoid the trading allowance trap
In late 2024 you became self-employed. You’re now completing your tax return for 2024/25 and will claim the trading allowance instead of a tax deduction for business expenses. Could this impact your NI record and state pension entitlement?
-
Time off for fertility treatment?
A survey by Fertility Matters at Work has revealed that more than one-third of employees undergoing fertility treatment have resigned or are considering resigning because of the physical and emotional toll. Is there a right to time off for fertility treatment?