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HMRC internal manual

Stamp Duty Land Tax Manual

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

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 £1,000,000.  

  • Applying multiple dwellings relief the SDLT due would be £30,000.  (Average price 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 £140,000, calculated as follows:    

Average purchase £300,000 SDLT due
3% on the first £125,000 = £3,750
5% on the next £125,000 = £6,250
8% on the final £50,000 =  £4,000
SDLT due per flat £14,000
Total SDLT due £140,000

 

  • 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.