Gone But Not Forgotten: Availability Of Multiple Dwellings Relief To Reduce SDLT

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DMH Stallard

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DMH Stallard is an award winning South East law firm with offices in London, Brighton, Gatwick, Guilford, Hassocks and Horsham. DMH Stallard has grown rapidly since it was established in 1970, and continues to maintain its focus on building long term relationships with clients to help deliver their goals and objectives.

Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) was abolished for transactions completed after June 1, 2024, but claims can still be made retroactively within a year or longer for overpayment relief. MDR applies when acquiring more than one dwelling in a transaction, potentially reducing SDLT significantly. Claiming MDR does not automatically incur the 3% additional property surcharge unless specific conditions are met. Professional advice is recommended to navigate complexities a
United Kingdom Tax
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Multiple Dwellings Relief, a relief to reduce SDLT, was abolished for land transactions completed on or after 1 June 2024. But you may not have missed your chance to claim: you have a year to amend your SDLT return, and longer if you wish to claim overpayment relief.

Can I claim Multiple Dwellings Relief to reduce SDLT?

You can claim MDR if you acquire more than one "dwelling" in one transaction or set of linked transactions.

The calculation itself, and the rules on what constitutes a "dwelling", are complex. Our specialist tax team can help you to:

  • Decide whether you might have a retrospective claim, and, if you decide to go ahead,
  • Make that claim on your behalf.

What follows is a general introduction to MDR, and some other points to consider. If you would like to discuss your transaction, please contact our team using the details at the end of this article.

What is a "dwelling"

The legislation states that a building or part of a building is a dwelling if it's used as, or is suitable for use as, a single dwelling, or is in the process of being constructed or adapted for such use.

So, how do you know whether your spare room, annex or top floor flat counts as a dwelling, separate to your main house? The courts and HMRC provide guidance on the factors to consider, although you will need to weigh these up as the existence of one particular factor will not be decisive.

How much could I claim?

The relief will broadly reduce your SDLT to the point where it reflects what SDLT would have been due, had the properties been acquired completely separately. As the rate of SDLT increases with the price you pay, for example with no tax due at all on purchases under £250,000, a successful claim can result in significant savings.

If I claim Multiple Dwellings Relief won't I also be charged the 3% additional property surcharge?

If you purchase a residential property, and as a result you own (or if you already own) more than one residential property, the normal SDLT rates are increased by 3%.

But, just because you're claiming MDR, it doesn't automatically mean you are due to pay the surcharge. The tests are different, and the surcharge doesn't apply in all circumstances. For example, if you don't own any dwellings already, and purchase a property with a self-contained annex, this may qualify as a separate dwelling for MDR, and relief may be due. However, you may not need to pay the additional property rates if it is classed as "subsidiary" to the main dwelling.

How can I claim Multiple Dwellings Relief after my purchase?

You still have time: you can claim through an amendment to your SDLT return within 12 months of the date your original return. Plus if it's been more than a year, you may still be able to make a claim to overpayment relief within 4 years. Claiming the relief can result in a substantial refund of SDLT.

But be aware that HMRC have the power to open enquiries into your amended return or your claim to overpayment relief, and if they find that you have incorrectly claimed MDR, they will seek to recoup that relief, interest will be chargeable, and you may be subject to penalties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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