Avoiding stamp duty when buying uninhabitable properties. Why a Building Survey is Crucial: A Case Study of an Uninhabitable House in Notting Hill

Avoiding stamp duty when buying uninhabitable properties. Why a Building Survey is Crucial: A Case Study of an Uninhabitable House in Notting Hill

Tuesday 29th August 2023

In a recent survey conducted by Tayross Associates, a prominent building surveying consultancy, a house in the renowned neighbourhood of Notting Hill was found to be uninhabitable due to extensive damp and flood damage. This case study sheds light on the importance of thorough building surveys and highlights potential benefits, such as avoiding stamp duty, for properties deemed uninhabitable.

Uncovering Damp and Flood Damage:
During the inspection, our expert surveyors discovered a significant presence of damp within the property. The walls and plaster were visibly damaged, indicating long-standing moisture issues. Additionally, the extension that had been built, the roof structure has suffered from excessive condensation, missing vapour barrier, no ventilation resulting in soft decking/mineral roof materials. These findings raised serious concerns about the structural integrity of the rear extension, not de to heave or subsidence, but the very poor materials used in the construction. Not being conducive to renovating into a property for modern living.

Consequences of Uninhabitable Conditions:
Living in an uninhabitable property poses numerous challenges and risks to both residents and the overall value of the house. Dampness not only compromises the aesthetic appeal but also leads to the growth of mold and mildew, which can adversely affect the health of occupants. Furthermore, excessive water damage, caused by the roof above weakens the structural timbers and lime plaster walls and ceilings components, potentially jeopardising the safety of those living within the premises.

Avoiding Stamp Duty on Uninhabitable Properties:
One potential silver lining for the homeowners of this uninhabitable property is the possibility of avoiding stamp duty. Stamp duty is a tax levied on the purchase of residential properties in the UK. However, properties that are deemed uninhabitable may be eligible for an exemption or a reduced rate. This presents an opportunity for the homeowners to save a significant sum of money, considering the cost of stamp duty can be substantial.

Steps to Rectify the Situation:
Upon identifying the uninhabitable conditions, it is crucial for the property owners to take immediate action to rectify the issues. Engaging professional contractors and specialists in dealing with damp and roof flood damage is essential. They can provide expert advice and propose appropriate remedial measures to restore the property to a habitable state. Timely restoration not only ensures the well-being of potential future occupants but also helps safeguard the property's investment value.

The Importance of Building Surveys:
The case study exemplifies the significance of conducting comprehensive building surveys before purchasing or inhabiting a house. A thorough survey helps identify potential risks, underlying issues, and structural defects that may not be immediately apparent to the untrained eye. By investing in a professional survey, homeowners can make informed decisions and avoid costly surprises down the line.

How to Apply for Stamp Duty Exemption:
Applying for stamp duty exemption requires careful consideration and adherence to specific guidelines. Consult with a legal professional or tax advisor to understand the rules and regulations in your jurisdiction. Obtain a building surveyor's report to identify any property issues. Gather supporting documentation such as photographs and repair estimates, this will be included in the Building Surveyors report. Complete the application form and submit it within the designated timeframe. Be prepared for a potentially lengthy processing time. Seek assistance from professionals if needed for appeals or alternative options.

The Process of Applying for an Exemption:
The amount of Stamp Duty payable depends on the value of the property and other factors. To complete the Stamp Duty Exemption process, you will need to submit an SDLT return form to HM Revenue and Customs (HMRC). This form can be found on the official HMRC website or obtained from a legal professional as mentioned above. It is important to start the SDLT process as soon as possible after agreeing on a sale or transfer, as you are required to submit the SDLT return and pay any tax due within 14 days after completion. However, if you are eligible for an exemption, such as first-time buyers or certain types of property transactions, you should start the process well in advance to ensure you have the necessary documentation and meet all the requirements for exemption. As mentioned, it is best to seek legal advice if you feel like you may be entitled to an exemption.

The case study of the uninhabitable house in Notting Hill underscores the importance of building surveys in ensuring the safety and habitability of a home. Tayross Associates' inspection revealed, very poor construction, extensive damp and flood damage, highlighting the need for immediate remedial action. Additionally, the potential for exemption or reduction in stamp duty on uninhabitable properties offers a glimmer of financial relief for affected homeowners. Remember, investing in a thorough building survey can save you from future headaches and financial burdens, ensuring a comfortable and secure living environment.

Here at Tayross, Carl is a Chartered Senior Surveyor with experience in Planning, Building, Surveying and Party Wall related matters. He is happy help with any questions you may have regarding the above.

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