The tax authority has warned that homeowners are being targeted but could end up with unexpected bills
Homebuyers are being urged to beware of rogue tax refund agents who are bombarding households with bogus promises of stamp duty rebates – leaving many with huge unexpected tax bills. HMRC has revealed that fraudulent refund schemes have surged over the past year, with nearly £201million in wrongly claimed stamp duty repayments being clawed back in 2024–25.
That is more than double the £85million recovered in the previous year. The tax authority said it launched 3,000 investigations into fake Stamp Duty Land Tax (SDLT) refund claims – often involving homeowners tricked into thinking they had overpaid tax when buying their property.
The crackdown follows a wave of complaints from buyers who were targeted by refund firms after purchasing a home. The agents typically contact recent buyers by post, email or social media, offering to submit refund claims on their behalf for a hefty commission.
An HMRC spokesperson warned: “Homebuyers should be on the lookout for rogue repayment agents offering to make SDLT repayment claims for them. If the claim is inaccurate, they could end up paying more than the amount they were trying to recover.”
Buyers hit with five-figure bills
One common tactic involves agents falsely claiming that a property qualifies for a commercial or “mixed-use” tax rate because it required extensive renovation. Buyers are told they can reclaim thousands, only to discover months later that the property was still legally “residential” – meaning the refund was illegitimate.
In one case a family who bought a £1.1million London property in need of rewiring and a new boiler were persuaded to file a refund worth £9,250. After HMRC’s compliance check, the claim was rejected and the couple were ordered to repay the full sum plus interest and penalties – even though they had already lost 30% in commission to the refund firm.
Landmark ruling strengthens HMRC
The clampdown follows a Court of Appeal ruling that sided with HMRC’s interpretation of the law: homes needing repair are still classed as dwellings for stamp duty purposes.
The decision ended years of confusion exploited by refund agents, who claimed that uninhabitable or rundown homes could be treated as non-residential, qualifying for lower SDLT rates.
How the scam works
Stamp Duty Land Tax is paid when buying property above certain thresholds. First-time buyers pay nothing up to £300,000, and 5% on the portion between £300,001 and £500,000. Other buyers pay from £125,000, with rates rising in bands. Second homes attract an additional 3% surcharge.
Rogue agents typically argue that the property’s condition means it should qualify for a refund – charging commission of up to 30% on any money reclaimed. But if HMRC later rules the claim invalid, the homeowner is responsible for repaying the entire amount, plus fines and interest.
Refund firms under scrutiny
Refund agents operate with minimal regulation, disappearing once clients face enforcement action. Others pressure homeowners into signing “no win, no fee” contracts that are difficult to cancel. HMRC said it has increased enforcement against such companies and encouraged buyers to check directly with the tax authority before making or authorising any repayment claim.
A spokesperson added: “We strongly advise anyone who thinks they may have overpaid SDLT to contact HMRC directly. You don’t need to use an agent and you should never sign documents you don’t fully understand.”
