Abolition of Multiple Dwellings Relief in Residential Property Transactions

The Chancellor announced in the recent budget that Multiple Dwellings Relief (MDR) will be abolished from 1 June 2024. 

MDR was introduced in 2011 with the aim to promote investment in residential property and the private rented sector.  The relief enabled a purchaser of two or more dwellings under a single transaction, or linked transactions, to benefit from Stamp Duty Land Tax (SDLT) rates based on the average value of the dwellings, as opposed to their aggregate value.  However, according to research commissioned by HMRC, there was no strong evidence to indicate that MDR had a significant role in promoting residential property investment.

MDR will continue to apply to transactions where contracts were exchanged on or before 6 March 2024 even where completion takes place after 1 June 2024, subject to there being no variation of the contract after 6 March 2024.

Buyers of 6 or more residential dwellings will continue to be able to pay SDLT at the non-residential rates which can lead to a significant reduction in SDLT payable, however the SDLT will still often be higher than where MDR could be claimed.