17
April
2024

A Guide to the Abolishment of Multiple Dwelling Relief

Whilst the Spring Budget has abolished MDR, there is no change to the existing rule for transactions involving the purchase of six or more residential properties.

Ann-Marie Daly | Real Estate Solicitor

In the 2024 Spring Budget, the Chancellor announced that Multiple Dwelling Relief (MDR) is to be abolished following a number of consultations which concluded that MDR was no longer fulfilling its purpose.

In this guide, our Real Estate Solicitor, Ann-Marie Daly explains what this means for the real estate market.

What is Multiple Dwelling Relief?

MDR was introduced in 2011 to reduce a potential barrier to investment in residential property and promote private rented sector (PRS) housing supply.

MDR is a stamp duty tax relief that can apply to individuals and businesses and provides a reduction in Stamp Duty Land Tax (SDLT) when buying two or more dwellings in a transaction. When using MDR, the SDLT due is calculated based on the average value of the dwellings purchased rather than assessing each dwelling individually.

 

Implications of the Abolishment of Multiple Dwelling Relief

The removal of MDR has implications for property owners and investors as anyone involved in bulk property transactions will now face higher SDLT payments, as each dwelling will be subject to individual assessment.

 

Whilst the Spring Budget has abolished MDR, there is no change to the existing rule for transactions involving the purchase of six or more residential properties. Transactions of this nature are not treated as residential properties and instead, the non-residential property SDLT rates will apply, however, this relief will still represent a loss of value in comparison to MDR

 

The Abolishment of Multiple Dwelling Relief Timeline

  • The removal of MDR was announced on 6 March 2024 with the legislation coming into force on 1 June 2024.
  • If contracts were exchanged on or before 6 March 2024, MDR may still be available even if completion takes place after 1 June 2024 subject to there being no variation of the existing contract after 6 March 2024.
  • If contracts exchange after 6 March 2024 and are substantially performed before 1 June 2024 then MDR may still be available.

If you’re a property owner or an investor and would like to discuss Multiple Dwelling Relief, our expert Real Estate solicitors can offer practical guidance and support. 

Please email Ann-Marie Daly for more information via ann-marie.daly@primaslaw.co.uk 

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