Multiple Dwellings Relief (MDR), when available, can provide you with reduced rates of Stamp Duty Land Tax (SDLT). There is much confusion about what constitutes a ‘dwelling’ meaning there have been many cases of MDR going unclaimed.

We detail what MDR is and when it applies below.

Multiple Dwelling Relief allows the Stamp Duty Land Tax on the purchase of two or more dwellings purchased in a single transaction, a scheme or a series of linked transactions to be reduced by a significant amount.

A dwelling is classified as each buildings being independent from each other, and possess all the necessary domestic facilities to enable someone to live in each independently. This also extends to flats, where although the building is one unit, each flat is classified as a separate dwelling.

Annex’s do not count. Or at least, MDR has previously been refused at tax tribunals on the basis of MDR applying to a building and 1 annex.

If MDR is applicable, SDLT isn’t calculated as one purchase, but each dwelling separately.

For example:

  • If you purchased a property for £845,000
  • SDLT is calculated at 3% on the first £500,000
  • SDLT is calculated at 8% on the remaining £345,000
  • The total SDLT due is therefore £42,600
  • Under MDR, the £845,000 is split into 2 transactions (for 2 properties), so £422,500 at 3%, SDLT, and then another £422,500 at 3%.
  • The total SDLT is £12,675 on each property, and £23,350 in total.

In this example, by not claiming MDR, you could have overpaid £17,250!

We can help

If you are looking to buy a property soon and think this may apply, please get in touch with us and we can help you with your MDR claim.

Email or call 01474 853 856.

Want to find out more?

Call us on (01474) 853856 and we will put you in contact with one of our advisers, or send us an enquiry by clicking below.

Send us an enquiry