What is Multiple Dwellings Relief?
Multiple dwellings relief (MDR) was a tax relief introduced by HMRC. This relief reduced the amount of Stamp Duty Land Tax (SDLT) that was paid on the purchase of a property. It is applied when the purchase included at least two dwellings.
Multiple Dwellings Relief meant that buyers do not pay a higher rate of SDLT than if the properties were bought separately. The tax is calculated based on the average value of the properties rather than their total value which resulted in tax savings. Therefore, this relief was particularly beneficial to property investors.
New measure implemented
From the 1st of June 2024, MDR has been abolished and can no longer be claimed for transactions completing on or after 1 June 2024.
However, MDR can still be claimed if:
- Contracts were exchanged on or before 6 th March 2024
- Contracts were substantially performed before 1 st June 2024
- Contracts completed before 1st June.
Why was it abolished?
According to research, MDR was originally introduced to reduce barriers for investment into properties and to promote the private rented sector housing supply.
After evaluation, it has been concluded that there is no evidence to support that the relief played a significant factor in supporting residential property investment and that overall there has not been a positive impact due to the relief. Therefore, since MDR has not proven to be cost effective, from the 1st June, it has been abolished.
Who will this have an impact on?
- The change will not impact individuals purchasing a single dwelling. It
will only increase SDLT payable by individuals who are purchasing two or more
dwellings in a single or linked transaction. - Only businesses purchasing multiple dwellings in a single, or linked
transactions will be impacted. Businesses purchasing six or more dwellings or
mixed property will continue to qualify for the non-residential rates of SDLT.
If you wish to find out further information, please email us at lawyers@bondadams.com or call us at 0116 285 8080 and our team will be happy to assist.
Contact us
Bond Adams Solicitors
Richmond House
94 London Road
LEICESTER
LE2 0QS
0116 285 8080
lawyers@bondadams.com
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