SDLTM09840 - SDLT - higher rates for additional dwellings: Interaction with multiple dwellings relief - MDR


·     Multiple dwellings relief (“MDR”) has been abolished for transactions which complete, or which substantially perform, on or after 1 June 2024.

·     This guidance is only applicable to transactions with an effective date prior to 1 June 2024.

Where two or more dwellings are purchased in a single or linked transaction multiple dwellings relief (FA2003/Schedule 6B) can be claimed.  Where six or more dwellings are purchased in a single transaction the purchaser can choose whether to apply the non-residential rates of SDLT or claim multiple dwellings relief and pay the higher rates [Section 116(7) FA 2003].

Example

  • A company purchases a block of 10 flats for total consideration of £1,000,000.
  • Applying multiple dwellings relief the SDLT due would be £30,000.  (Average consideration of £100,000 x 3% x 10).
  • Applying the non-residential rates the SDLT due would be £39,500. (£150,000 x 0% plus £100,000 x 2% plus £750,000 x 5%)
  • The purchaser can choose to apply the non-residential rates or make a claim for multiple dwellings relief.

Example

  • A company purchases a block of 10 flats for £3,000,000.
  • Applying multiple dwellings relief the SDLT due would be £115,000, calculated as follows:  

Average purchase £300,000

SDLT due

3% on the first £250,000 =

£7,500

8% on the final £50,000 = 

£4,000

SDLT due per flat

£11,500

Total SDLT due

£115,000

  • Applying the non-residential rates the SDLT due would be £139,500. (£150,000 x 0% plus £100,000 x 2% plus £2,750,000 x 5%).

  • The purchaser can choose whether to apply the non-residential rates or make a claim for multiple dwellings relief.