SDLTM29902 - Abolition of multiple dwellings relief for SDLT (01 June 2024): Exchange of contracts on or before 6 March 2024

MDR has been abolished for land transactions with an effective date falling on or after 1 June 2024.

However, MDR remains available for land transactions for which the contract relating to the transaction was entered into on or before 6 March 2024, regardless of when completion takes place. This is provided that the transaction is not an excluded transaction.

For those purchasers who have contracts which exchanged on or before 6 March 2024, they need to ensure they include this date (the date of exchange) on their return, in addition to the date of completion, otherwise the claim to MDR will be rejected.

A transaction is excluded where:

·       There is a variation of the contract or an assignment of rights under the contract after 6 March 2024.

·       The transaction is effected after 6 March 2024 as a consequence of the exercise of an option, right of pre-emption or similar right.

·       After the 6 March 2024 there is an assignment, sub sale or other transaction relating to the whole or part of the subject-matter of the contract that results in a person other than the purchaser under the contract becoming entitled to call for a conveyance.

Where any of the above exclusions apply the transaction must complete before 1 June 2024 to be eligible for MDR.

 Example 1:

On 4 March 2024 an individual exchanges contracts in relation to the purchase of 2 dwellings for which MDR would be available. They do not complete on the sale until 4 June 2024.

Nothing happens between exchange and completion that would cause it to fall within one of the exceptions listed above.

The transaction was effected in pursuance of a contract entered into on or before 6 March 2024 and is not an excluded transaction. The completion date falling on or after 1 June 2024 is therefore irrelevant.

This transaction remains eligible for MDR.

Example 2:

On 4 March 2024 an individual exchanges contracts in relation to the purchase of 2 dwellings for which MDR would be available. They do not complete on the sale until 4 June 2024.

On 4 April 2024 the contract is varied to change the agreed purchase price for the transaction, causing it to fall within one of the exceptions listed above (i.e. there has been a variation of the contract after 6 March 2024).

Whilst the transaction was effected in pursuance of a contract entered into on or before 6 March 2024, upon variation of the contract it becomes an excluded transaction. The varied contract would have to complete before 1 June 2024 to qualify for MDR.  As the completion date was on or after 1 June 2024 the transaction is no longer eligible for MDR.