Guidance on SDLT Rates and Multiple Dwellings Relief Before June 2024

SDLT, multiple dwellings relief and higher rates before 1 June 2024

Before 1 June 2024, buyers of two or more dwellings in one transaction, or in linked transactions, could sometimes claim multiple dwellings relief (MDR) to reduce Stamp Duty Land Tax. Where six or more dwellings were bought in a single transaction, the buyer could choose either non-residential SDLT rates or MDR using residential rules, including the higher rates where they applied, so the tax had to be calculated both ways to find the lower result.

• MDR applied only to transactions with an effective date before 1 June 2024, as it was abolished for later transactions.
• If fewer than six dwellings were bought, MDR might be available if the legal conditions were met.
• If six or more dwellings were bought in one transaction, the buyer could choose between non-residential SDLT rates and MDR.
• Using MDR did not remove the higher residential rates, which often applied to companies and additional property purchases.
• The best outcome depended on the figures, because MDR could produce less SDLT than non-residential rates, especially where averaging lowered the price per dwelling.
• In practice, buyers also needed to check whether the properties counted as dwellings, whether transactions were linked, and whether HMRC guidance matched the legislation.

Scroll down for the full analysis.

SDLT and multiple dwellings relief: how it interacted with the higher rates for additional dwellings before 1 June 2024

This page explains how Stamp Duty Land Tax worked when a buyer acquired more than one dwelling in the same transaction, or in linked transactions, before 1 June 2024. In particular, it looks at the interaction between multiple dwellings relief, the higher rates for additional dwellings, and the special rule for buying six or more dwellings in one transaction.

What this rule is about

Before 1 June 2024, a buyer who bought two or more dwellings in a single transaction, or in linked transactions, could in some cases claim multiple dwellings relief, usually called MDR. MDR changed the way SDLT was calculated by averaging the price across the dwellings and then multiplying the tax back up.

This mattered because purchases of dwellings by companies, and many purchases of additional residential property by other buyers, could also fall within the higher residential rates. The question was therefore not just whether MDR was available, but whether using it produced a lower tax charge than other possible SDLT treatments.

There was a further important rule where six or more dwellings were bought in a single transaction. In that situation, the buyer could choose between:

• treating the purchase under the non-residential SDLT rates, or
• claiming MDR and paying SDLT on the residential basis, including the higher rates where they applied.

The official material here is dealing with that choice.

What the official source says

HMRC’s manual states that MDR has been abolished for transactions with an effective date on or after 1 June 2024. So the guidance discussed here only applies where the effective date was before 1 June 2024.

The manual then says:

• if two or more dwellings were purchased in a single or linked transaction, MDR could be claimed under Schedule 6B to Finance Act 2003;
• if six or more dwellings were purchased in a single transaction, section 116(7) Finance Act 2003 allowed the purchaser to choose either the non-residential SDLT rates or MDR;
• where MDR was used in the examples, the higher residential rates were applied.

The examples in the manual compare the SDLT result under each route. In both examples, MDR produced a lower SDLT charge than the non-residential rates.

The manual also notes that its examples use a 3% higher-rate supplement. It adds that the higher rates increased from 3% to 5% on 31 October 2024. That increase is a later development, but the page itself is expressly limited to transactions with an effective date before 1 June 2024 because MDR was abolished from that date for new transactions.

What this means in practice

For pre-1 June 2024 transactions, buying multiple dwellings did not automatically mean one SDLT treatment. You had to work out which regime was available and then compare the tax result.

The practical position was broadly as follows:

• If fewer than six dwellings were bought, the buyer might be able to claim MDR if the statutory conditions were met.
• If six or more dwellings were bought in a single transaction, the buyer had a choice: non-residential rates, or MDR.
• If MDR was claimed for dwellings, the residential SDLT rules were still relevant, including the higher rates where they applied.

This is important because some buyers assumed that a large block purchase would always be taxed at non-residential rates. That was not the full picture. For six or more dwellings in one transaction, the legislation gave a choice, and the better result depended on the figures.

In lower-value acquisitions spread across many dwellings, MDR could be especially attractive because averaging the price per dwelling might keep each dwelling’s notional price in a lower SDLT band, even after adding the higher rates supplement. But that was not guaranteed. The buyer still needed to compare the MDR result against the non-residential rates.

How to analyse it

A sensible way to approach a pre-1 June 2024 case is to ask these questions in order.

• What is the effective date of the transaction? If it is on or after 1 June 2024, this MDR guidance does not apply.
• Are there two or more dwellings in a single transaction or linked transactions? If not, MDR is not in point.
• Are six or more dwellings being bought in a single transaction? If yes, consider both possible SDLT treatments.
• Does the purchase fall within the higher residential rates? For example, company purchases of dwellings commonly did.
• If MDR is available, what is the SDLT using the average price per dwelling and then multiplying by the number of dwellings?
• What would the SDLT be if the non-residential rates were used instead?
• Which route produces the lower liability?

The key point is that the six-or-more rule does not itself tell you which treatment is better. It gives you a choice, and the numbers decide the answer.

Example

Illustration based on the HMRC examples.

A company buys 10 flats in one transaction for £1,000,000, before 1 June 2024.

If MDR is claimed, the average price per flat is £100,000. Using the higher residential rates shown in the manual example, the SDLT works out at £30,000 in total.

If instead the buyer chooses the non-residential rates, the SDLT is £39,500.

On those figures, MDR gives the lower result, so it is the better choice.

The same logic applies at higher values. HMRC’s second example uses a £3,000,000 purchase price for 10 flats. There too, MDR produces less SDLT than the non-residential rates.

Why this can be difficult in practice

The main difficulty is that several separate SDLT concepts are interacting at once:

• what counts as a dwelling;
• whether transactions are linked;
• whether the higher residential rates apply;
• whether MDR is available at all; and
• whether the six-or-more rule gives a better outcome under non-residential rates or under MDR.

The HMRC page is quite short and focuses only on the comparison once those points have already been resolved. In real transactions, those earlier questions can be just as important as the arithmetic.

Another point that can cause confusion is timing. The manual page mentions the later increase in the higher-rate supplement, but it also states that MDR was abolished for transactions with an effective date on or after 1 June 2024. So a reader must not assume that the examples can simply be reused for later transactions. The legal framework changed.

It is also important not to treat HMRC’s manual as if it were the legislation itself. The manual is explaining HMRC’s view of how the statutory rules work. The legal effect comes from the Finance Act 2003 provisions it cites.

Key takeaways

• MDR is only relevant here for transactions with an effective date before 1 June 2024.
• Where six or more dwellings were bought in a single transaction, the buyer could choose between non-residential rates and MDR.
• If MDR was used, the higher residential rates could still apply, so the SDLT had to be calculated both ways and compared.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on SDLT Rates and Multiple Dwellings Relief Before June 2024

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