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). 

In the examples below, the higher rates of SDLT used was 3%.The higher rates increased from 3% to 5% on 31 October 2024. 

Example 

  • A company purchases a block of 10 flats for a 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.