Read the original guidance here:
HMRC SDLT: Relief for Multiple Dwellings Transfers: Conditions and Exceptions Explained

Availability of Relief for Transfers Involving Multiple Dwellings

This guidance explains how relief can be obtained when multiple dwellings are involved in property transactions. This is particularly useful for buyers involved in linked transactions or buying multiple properties at the same time. The primary legislation governing this relief is set out in Finance Act 2003 (FA03) Section 58D and Schedule 6B. When referencing this guidance, any paragraph numbers correspond to that Schedule unless stated otherwise.

Key Principles of Multiple Dwellings Relief

• The relief is available when a property transaction involves at least two separate dwellings.
• Dwellings can be acquired in one single transaction or as linked transactions.
• Including properties that are not dwellings in the transaction does not invalidate the relief, which means if you are buying multiple homes along with a commercial property, you can still claim relief.

To clarify further, if someone buys two houses and a piece of land, they can still benefit from the relief on the purchase of the two houses.

Exclusions to Relief Claims

Despite the relief being available, there are specific circumstances under which it cannot be claimed. The main conditions prohibiting the relief are outlined as follows:

• If the transaction involves tenants of flats exercising collective rights to buy their apartments as set out in FA03 Section 74, relief cannot be claimed. An example of this situation is if all the flat owners in a block want to band together to buy the freehold; they cannot then claim multiple dwellings relief.
• If crofting community rights to buy are being exercised, as detailed in FA03 Section 75, the relief is also not applicable. This means if a community in Scotland is exercising their rights to purchase croft land, they won’t be able to claim this relief.
• The relief does not apply if the dwelling qualifies for the higher rate of Stamp Duty Land Tax (SDLT) of 15%. This higher rate usually applies to non-natural persons, such as companies purchasing residential properties. If a property is bought under these stringent conditions, the relief won’t be available.
• SDLT group relief, reconstruction relief, and acquisition relief cannot be claimed if they have been submitted or withdrawn as per FA03 Schedule 7.
• If a charity has claimed relief or if the relief has been withdrawn, as per FA03 Schedule 8, then it will not be available for that transaction.

Moreover, it’s important to know that relief is also not available if the dwelling is subject to a long lease, with some exceptions. Specific details regarding these exceptions can be found in paragraphs 2(6) and 2(7) of the relevant Schedule.

Understanding ‘Dwelling’ for Relief Purposes

The term ‘dwelling’ plays a central role in claiming multiple dwellings relief. To understand what qualifies, you should refer to SDLTM29955. In summary, a dwelling is typically considered a place that is used as a home or residence, such as a house, a flat, or a similar type of accommodation.

Special Transitional Rules

Recent changes in legislation mean that certain aspects of the relief and its application may have transitional rules associated with them. Here’s a summary of those rules:

• The MDR (Multiple Dwellings Relief) has been abolished for transactions that are completed or substantially performed on or after 1 June 2024. However, specific transitional rules are in place which can be referenced in SDLTM29902.
• Transactions that are linked (those that are connected in some way) may be subject to different rules during this transitional phase, with details available in SDLTM29903.

It’s crucial to be aware of these changes, especially if you are planning to buy multiple properties or are involved in a linked transaction.

Application Process for Multiple Dwellings Relief

The process of applying for multiple dwellings relief requires you to make a specific declaration when filing your SDLT return. Here are the steps involved:

• When completing the SDLT return, you must clearly indicate that you are claiming multiple dwellings relief.
• Provide adequate details about the dwellings that are part of the transaction, including the value of each property.
• Ensure that the overall transaction complies with all the conditions necessary for the relief, as outlined above.

Applications for relief can often be straightforward, but ensuring that you understand the requirements and providing complete information will help ease the process.

Practical Examples of Multiple Dwellings Relief

To further clarify how the relief works, let’s look at some practical examples:

• Example 1: James purchases two residential flats in the same transaction. Since he is buying two dwellings in a single deal, he is eligible to claim multiple dwellings relief on his SDLT return.
• Example 2: Sarah buys a residential house, a flat, and a piece of vacant land all under one transaction. The inclusion of the vacant land does not affect her ability to claim relief for the two dwellings, so she can still benefit from the relief.
• Example 3: A group of tenants in a block of flats decides to buy the freehold together. Since they are exercising collective rights, they will not be able to claim the multiple dwellings relief.
• Example 4: A company buys two apartments and a commercial property. As long as the two purchased properties are residential and meet the criteria, the company can attempt to claim the relief despite one part of the purchase being commercial.

Final Thoughts on Relief for Multiple Dwellings Transactions

Understanding the eligibility for and the application process surrounding multiple dwellings relief is essential for anyone involved in purchasing multiple homes or properties. It can save a significant amount of money, making property transactions more affordable. Always ensure that you are aware of the latest legislation and guidance to make the most informed decisions when engaged in these transactions.

For detailed examples and further clarification, relevant links for each SDLT manual reference can be found by browsing through the provided sections.