SolvedSDLTM09840 | SDLT - higher rates for additional dwellings: Interaction with multiple dwellings relief - MDR
From HM Revenue & Customs · Stamp Duty Land Tax Manual
· 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.