Read the original guidance here:
HMRC SDLT: SDLTM29915 – Relief for transfers involving multiple dwellings: Relevant transactions FA03/SCH6B/PARA2

Understanding Relief for Transfers Involving Multiple Dwellings

What is a Multiple Dwelling Transaction?

In the context of property transactions, it’s important to understand the definition of what constitutes a ‘multiple dwelling transaction’. This refers to any transaction where the main focus is on acquiring an interest in two or more residential properties. Here are some examples:

• If a buyer purchases two flats within the same building, this is a multiple dwelling transaction.
• If someone buys a house along with a separate flat or studio, this also qualifies as a multiple dwelling transaction as it involves at least two separate dwellings.

What is a Single Dwelling Transaction?

Conversely, a ‘single dwelling transaction’ is focused on just one residential property. This can involve:

• A purchase of a standalone house.
• The purchase of a single flat within an apartment block, without any other property involved.

Key Principles Behind SDLTM29915

When dealing with multiple dwelling transactions, certain reliefs can be applied under specific conditions laid out in the relevant legislation. These reliefs are intended to lessen the financial burden associated with purchasing more than one dwelling. Here are the main principles you should be aware of:

• Relief for Additional Dwellings: When buying multiple properties, relief is available on the total stamp duty, which can make the transactions more affordable.
• Calculation of Relief: The relief is calculated based on the total value of all the dwellings combined. It’s essential to accurately assess this value to ensure you receive the correct relief.
• Linked Transactions: If properties are purchased in a series of linked transactions, these can also qualify for relief under specific conditions. Understanding how these connections work is key to maximising the relief.

Understanding the Legislation

The legislation governing these transactions is outlined in SDLTM29915. It specifies the nature of the relief applicable to multiple dwelling transactions and the criteria that must be met for it to apply. Key aspects include:

• Eligibility: To qualify for the relief, the transaction must involve at least two dwellings. Additionally, there are specific values and conditions that need to be satisfied.
• Valuation: Accurate valuation is crucial as it impacts the amount of relief you will be entitled to. It’s important to ensure that each dwelling’s contribution to the total value is reflected properly.
• Filing Requirements: Ensure all necessary paperwork is submitted within the given timelines to benefit from the relief.

Transitional Rules

From 1 June 2024, a change in legislation regarding the Multiple Dwellings Relief (MDR) will come into effect. The MDR will no longer apply to transactions that are completed or substantially performed after this date, except under certain special transitional rules. Details about these transitional rules can be found in SDLTM29902.

Linked Transactions

Sometimes, transactions are linked, meaning they are connected in such a way that the purchase of one property is dependent on another. Special rules apply to these linked transactions.

• Definition of Linked Transactions: A linked transaction is one where the buyer agrees to purchase two or more dwellings as part of a single arrangement.
• Reliefs for Linked Transactions: These might also qualify for multiple dwelling relief. However, careful attention must be paid to the conditions and how they are documented, as each case can vary.

Frequently Asked Questions

Here are some common questions regarding multiple dwelling transactions and the associated reliefs:

• What happens if I buy multiple properties but one is a commercial property? If the main focus of the transaction is on residential dwellings, the transaction can still qualify as a multiple dwelling transaction.
• Can I claim the relief if the properties are not purchased at the same time? Yes, but only if the purchases are clearly linked and meet the relevant criteria outlined under the regulations.
• What if I only buy a portion of a multi-occupancy building? If you are acquiring a unit in a property with multiple dwellings, this typically counts as a single dwelling transaction, unless you are buying multiple units.

Final Considerations

When dealing with multiple dwelling transactions, being well-informed and prepared is essential. Whether you are an investor or a first-time buyer, understanding these rules can help you maximise any potential benefits from the relief available.

As the regulations can be complicated and may change, consider seeking professional advice suited to your specific circumstances to navigate the process effectively.