SDLT MDR – axed

April 2024 | Tax

As conveyancers will no doubt be aware, in the Budget of 6 March 2024, Multiple Dwellings Relief (MDR) will be abolished with effect from 1 June 2024. MDR is a bulk purchase relief from Stamp Duty Land Tax which applies to the purchase of two or more dwellings in England and Northern Ireland.

MDR will be abolished for transactions which complete, or which substantially perform, on or after 1 June 2024. Buyers who exchanged contracts on or before 6 March 2024 remain eligible for MDR regardless of when the transaction completes, provided there is no variation of the contract after that date. The government’s policy paper explains it thus:

‘Who is likely to be affected

Purchasers of residential property in England and Northern Ireland who acquire more than one dwelling in a single transaction or linked transactions.

General description of the measure

This measure abolishes Multiple Dwellings Relief (MDR) from 1 June 2024. MDR is a bulk purchase relief in Stamp Duty Land Tax (SDLT). The rate of tax is normally determined by the total consideration given for land. MDR is available to any purchaser buying 2 or more dwellings in a single transaction, or linked transactions, and allows the purchaser to calculate the tax based on the average value of the dwellings purchased as opposed to their aggregate value.

Policy objective

MDR was introduced in 2011 to reduce a potential barrier to investment in residential property and promote private rented sector (PRS) housing supply. An external evaluation of MDR carried out as part of HMRC’s Tax Reliefs Evaluation Programme found no strong evidence that the relief plays a significant role in supporting residential property investment, and that it has a minimal positive impact on overall housing supply or PRS supply. The evaluation has shown that MDR is not cost effective in meeting its original objectives. This measure therefore abolishes MDR from 1 June 2024.

Operative date

This measure will apply to transactions with an effective date on or after 1 June 2024.

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

MDR will also continue to apply to contracts which substantially perform before 1 June 2024.

For transactions which are linked and include the purchase of dwellings both before and after the change, those pre and post change transactions will be treated as unlinked for the purposes of MDR.

Current law

The SDLT legislation is in Part 4 to the Finance Act 2003.

Schedule 6B to the Finance Act 2003 sets out the rules for MDR.

Proposed revisions

Legislation will be introduced in Spring Finance Bill 2024 repealing Schedule 6B.

Impact on individuals, households and families

This change will not impact individuals purchasing a single dwelling. It will only increase the SDLT payable by individuals purchasing 2 or more dwellings in a single or linked transactions and may impact affordability for some households purchasing multiple dwellings. However, given the evaluation found that only 17% of private individuals claiming MDR said they were aware of MDR before purchase and that most individuals claiming MDR are for higher value purchases (with a median purchase value of £940,000), it is not expected that this change will impact family formation, stability or breakdown.

Customer experience is expected to remain broadly the same as this measure does not significantly alter how individuals interact with HMRC. However, the change will improve customer experience to the extent that it will simplify the SDLT rules and remove the scope for incorrect claims which would result in an HMRC enquiry to put it right.’


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