Read the original guidance here:
HMRC SDLT: SDLTM29902 – Abolition of multiple dwellings relief for SDLT (01 June 2024): Exchange of contracts on or before 6 March 2024

SDLTM29902 – Abolition of Multiple Dwellings Relief for SDLT (Effective 01 June 2024)

The Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax (SDLT) will no longer be available for land transactions that have an effective date on or after 1 June 2024. However, there are certain conditions under which MDR can still be claimed for transactions that are linked to contracts exchanged on or before 6 March 2024.

Key Details About MDR

For any property purchases that fit the criteria below, purchasers can continue to benefit from MDR:

• Contracts must have been exchanged on or before 6 March 2024.
• The date when the purchase is completed does not affect the eligibility for MDR, as long as the transaction isn’t one of the excluded types.

If a buyer has exchanged contracts by the 6 March 2024 deadline, it is essential for them to note this date on their SDLT return, in addition to the completion date. Failing to include this information may lead to the rejection of the MDR claim.

Excluded Transactions

A property transaction becomes excluded from MDR under the following circumstances:

• If there is a change to the contract terms or the rights outlined in the contract after 6 March 2024.
• If the transaction is completed after 6 March 2024 due to the exercise of an option, a right of pre-emption, or any similar rights.
• If any assignment, sub-sale, or related transaction occurs after 6 March 2024 that allows someone other than the original buyer to request a property transfer.

In such excluded transactions, it is mandatory for the sale to be completed before 1 June 2024 in order to still qualify for MDR.

Examples of MDR Eligibility

To provide better clarity, let’s consider two examples of how these rules apply.

Example 1

An individual finalises the exchange of contracts to buy two dwellings on 4 March 2024. The completion doesn’t happen until 4 June 2024.

• Since there are no actions taken between the exchange and the completion that might lead to an exclusion, this transaction remains valid for MDR.
• The fact that the completion date is after 1 June 2024 doesn’t matter here because the contract was initially agreed before the key date and does not fall into any excluded transactions.

Thus, this transaction is fully eligible for MDR.

Example 2

In this case, an individual exchanges contracts for the same two dwellings on 4 March 2024 and plans to complete the transaction by 4 June 2024.

• However, on 4 April 2024, the terms of the contract are changed—specifically, the purchase price is altered. This change happens after the critical date of 6 March 2024.
• Due to this variation in the contract, the transaction is now considered excluded from MDR. Although the original contract was in place before the cutoff, any changes made after that date disqualified it.
• Because the revised transaction would also need to complete before 1 June 2024 to be valid for MDR, and since it is set for completion after this date, it loses eligibility for MDR.

In summary, any variations made post-deadline can eliminate a purchaser’s chance to claim MDR, regardless of the original contract’s time frame.

Final Notes for Purchasers

It’s vital for buyers involved in property transactions to stay informed about these changes. Here are a few best practices:

• Keep track of all key dates including contract exchanges and completion dates.
• Review the terms of any contracts carefully to avoid exclusions.
• Ensure proper documentation is completed and submitted to prevent claims from being denied.

Understanding these guidelines can help purchasers navigate their transactions effectively and take advantage of available tax reliefs before the new rules come into effect.