Stamp Duty Land Tax: Changes to Multiple Dwellings Relief and Higher Rate Charges

How Multiple Dwellings Relief interacts with the higher SDLT rate for companies

For transactions with an effective date before 1 June 2024, Multiple Dwellings Relief (MDR) could still apply, but any dwelling that was actually charged at the special higher SDLT rate for certain companies or other non-natural persons had to be left out of the MDR calculation. That dwelling could not be included in the claim or counted in the number of dwellings, although other dwellings in the same deal might still qualify if they were not subject to that higher rate or were covered by a statutory exclusion.

• MDR was abolished for most transactions from 1 June 2024, so this issue mainly affects earlier or transitional cases.
• If a dwelling is subject to the special higher SDLT rate for certain non-natural persons, it must be taxed separately and excluded from any MDR claim.
• Other dwellings in the same transaction can still qualify for MDR if they are not caught by the higher rate, including where an exclusion from that rate applies.
• The key question is not simply whether the buyer is a company, but whether the particular dwelling interest is actually within the higher-rate charge.
• If an exclusion from the higher rate is later withdrawn, the MDR position may need to be recalculated and further SDLT returns may be required.
• In larger or mixed transactions, it may be necessary to allocate the purchase price between dwellings to work out which interests fall within the higher-rate rules and which remain eligible for MDR.

Scroll down for the full analysis.

Multiple Dwellings Relief and the higher SDLT rate for certain companies and other non-natural persons

This page explains how Multiple Dwellings Relief (MDR) interacted with the higher SDLT rate charged on some residential purchases by companies and other non-natural persons. The point matters because, where that higher rate applies, the dwelling caught by it cannot be included in an MDR calculation. That can change both the tax due and how the transaction must be reported. This guidance only matters for transactions with an effective date before 1 June 2024, because MDR was abolished for later transactions, subject to transitional rules.

What this rule is about

Before 1 June 2024, MDR could reduce SDLT where a buyer acquired more than one dwelling in a single transaction or linked transactions. Separately, a special higher SDLT rate applied to some acquisitions of high-value residential property by certain non-natural persons, such as companies, unless an exclusion applied.

The issue covered here is how those two regimes fit together. The basic rule is that a dwelling interest which is charged at the special higher rate is kept out of MDR. It cannot be included in the MDR claim and it does not count towards the number of dwellings used in the MDR calculation.

The source material also notes that the higher rate was increased from 15% to 17% from 31 October 2024. The practical interaction described here remains the same, but the source refers to the 17% rate. Because MDR was abolished for transactions completing or substantially performed on or after 1 June 2024, this interaction is mainly relevant to earlier transactions and to transitional cases.

What the official source says

HMRC’s manual states that a higher-threshold interest which is subject to the 17% rate under Schedule 4A cannot:

• form part of an MDR claim, or
• count as one of the total dwellings when working out the tax under Schedule 6B paragraph 5.

However, MDR may still be claimed for other dwelling interests in the same transaction if those interests are not subject to the 17% rate. That includes interests that are outside the 17% charge because they fall within one of the exclusions in Schedule 4A paragraphs 5 to 5F.

The manual also says that if relief from the higher rate is later withdrawn under Schedule 4A paragraphs 5G to 5K, that is treated as a change of circumstances for MDR purposes under Schedule 6B paragraph 6. If that happens, the MDR position must be recalculated and a further return or returns may need to be filed.

What this means in practice

If a company or other non-natural person buys several dwellings and one of them is caught by the special higher rate, you cannot simply bundle all the dwellings together and apply MDR across the whole acquisition.

Instead, you need to separate out the dwelling interest charged at the higher rate. That interest is taxed on its own. The remaining dwellings may still qualify for MDR if they are not themselves subject to that higher rate.

This has two practical consequences.

• The SDLT calculation may need to be split, rather than done as one single MDR computation across all dwellings.
• The return position may also need to be split. HMRC’s example says the higher-rate interest must be returned separately.

The position is different where a dwelling would otherwise look residential and high-value, but is excluded from the higher rate under one of the statutory exclusions. In that case, the dwelling is not blocked from MDR merely because it is owned by a company. If the exclusion applies, that dwelling can still be included in the MDR claim.

How to analyse it

A sensible way to approach the issue is to ask these questions in order.

• Is the transaction one to which MDR could in principle apply? This only matters for transactions with an effective date before 1 June 2024, or where transitional rules preserve MDR.
• How many dwellings are being acquired, and what are the separate chargeable interests?
• Is any dwelling interest subject to the special higher SDLT rate for certain non-natural persons under Schedule 4A?
• If yes, does any exclusion from that higher rate apply to that dwelling interest?
• If a dwelling is actually subject to the higher rate, remove it from the MDR exercise completely. Do not include it in the claim and do not count it in the total number of dwellings for the MDR calculation.
• For the remaining dwellings, consider whether MDR can be claimed in the normal way.
• Check whether the transaction needs separate reporting for the higher-rate interest and the MDR part.
• After completion, consider whether any later event withdraws an exclusion from the higher rate. If it does, the MDR calculation may have to be revisited as a change of circumstances.

The key analytical point is that the relevant question is not simply whether the buyer is a company. The real question is whether the particular dwelling interest is actually subject to the special higher rate, or instead falls outside it because an exclusion applies.

Example

Illustration: a company buys six dwellings in one transaction before 1 June 2024. One dwelling is a higher-threshold interest that is occupied by a non-qualifying individual, so the special higher rate applies to that dwelling. The other five dwellings are not subject to that higher rate.

In that situation, the higher-rated dwelling cannot be included in the MDR claim and cannot be counted as one of the dwellings in the MDR calculation. The company may still claim MDR for the other five dwellings, assuming the normal MDR conditions are met.

By contrast, if one of the dwellings would otherwise fall within the higher-rate regime but is excluded from it under the statutory exclusions, that dwelling is not shut out from MDR on that ground. HMRC’s farmhouse example makes that point: where the farmhouse is excluded from the higher rate because it forms part of the land and is occupied for the purposes of the farming trade, MDR can be claimed for that farmhouse together with the other dwellings.

Why this can be difficult in practice

The difficult part is often not the MDR rule itself. It is deciding whether a particular dwelling interest is in fact subject to the special higher rate, or whether an exclusion applies.

That can be fact-sensitive. For example, the availability of an exclusion may depend on how the dwelling is used, who occupies it, and whether the statutory conditions continue to be met after completion. If an exclusion is later withdrawn, the SDLT analysis does not stay frozen at the original filing position. The MDR calculation may need to be adjusted because the withdrawal is treated as a change of circumstances.

Another practical difficulty is allocation. In mixed acquisitions or larger transactions, the source examples refer to the attributable cost of particular dwellings. That means you may need a defensible basis for attributing consideration between different elements of the purchase in order to identify which interest is the higher-threshold interest and which dwellings remain available for MDR.

Finally, the law changed over time. MDR was abolished for later transactions, while the higher rate increased from 15% to 17% from 31 October 2024. So timing matters, and transitional provisions may affect which rules apply.

Key takeaways

• A dwelling interest that is actually subject to the special higher SDLT rate for certain non-natural persons cannot be included in an MDR claim.
• Other dwellings in the same transaction may still qualify for MDR if they are not subject to that higher rate, including where a statutory exclusion applies.
• If an exclusion from the higher rate is later withdrawn, the MDR position may need to be recalculated and further SDLT reporting may be required.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Stamp Duty Land Tax: Changes to Multiple Dwellings Relief and Higher Rate Charges

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