SDLTM29970 - Relief for transfers involving multiple dwellings: Example 1
The freehold of a new block of 20 flats is purchased for £2.5 million. There is no headlease and none of the flats is subject to a long lease.
The transaction is a relevant transaction for the purposes of the relief as it involves the acquisition of more than one dwelling - i.e. the 20 flats. The freehold is treated as if it were interests in the individual dwellings. The chargeable consideration divided by the number of dwellings is £125,000. This is below the normal 0% SDLT threshold but a minimum rate of tax under the relief applies.
If the other conditions are met MDR can be claimed but in almost all examples like this the higher rate for additional dwellings will apply. The higher rate was introduced on transactions with an effective date on or after 1 April 2016. The higher rate adds 3% to the standard SDLT rates.
More information about the higher rate can be found at SDLTM09730
If the purchaser is not UK resident, then the non-resident rates may also apply to the transaction, adding a further 2% to the standard rates or the higher rates for additional dwellings, if applicable. The non-resident rates of SDLT were introduced for transactions with an effective date on or after 1 April 2021.
More information about the non-resident rates can be found at SDLTM09850.