Spring Budget: SDLT multiple dwellings relief abolished

Multiple dwellings relief (MDR) for stamp duty land tax (SDLT) will be abolished from 1 June 2024.

The Chancellor has said MDR is being abolished because there was no strong evidence that MDR met its original objective of promoting investment in the private rental sector and there have been “incorrect and abusive” MDR claims.   

What is MDR?

Broadly speaking, MDR is an SDLT relief that can be claimed if more than one residential property is purchased. If MDR applies, SDLT is calculated by reference to the average value of the properties purchased rather than the total price payable for all the properties. As such, when buying multiple residential properties in one transaction, MDR can lead to a substantial SDLT saving.

What if you have already exchanged contracts or will complete a transaction before 1 June 2024?

MDR will still be available for contracts exchanged on or before 6 March 2024, provided that no variation of contract takes place after this date. MDR can also be claimed on residential purchases completed before 1 June 2024.

Why is MDR being abolished?

MDR was introduced in 2011 with the aim of promoting investment in residential property for the private rental sector. However, a consultation found that there was no strong evidence that it either played a role in business decision making, supporting investment, or increasing housing supply. 

Over half of businesses reported that the possibility of an MDR claim had limited to no influence on their decision making. Additionally, over half of all MDR claims were from individuals purchasing residential properties for private use.

How does this impact you?

If you are in the process of purchasing multiple residential properties and are intending to claim MDR, then:

  • You should consider completing your transaction before 1 June 2024
  • If you have already exchanged contracts, consider whether any variation to such contract is significant enough to jeopardise any MDR relief claim

If you need assistance in relation to MDR or any other SDLT issues, then our real estate tax team can help you.

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