MDR: calculating stamp duty on the non-home part of a purchase
In brief
For an eligible historic MDR claim, the non-home part of the price takes a proportion of SDLT calculated without MDR. It is not taxed separately.
- HMRC says MDR was abolished from 1 June 2024, subject to transition rules.
- The total price and a fair split remain essential.
- Linked purchases can require a wider calculation.
Scroll down for the full analysis.
Read the original guidance here:
MDR: calculating stamp duty on the non-home part of a purchase
MDR: calculating stamp duty on the non-home part of a purchase
If you bought homes with land or other property under an old multiple dwellings relief claim, do not apply stamp duty rates directly to the leftover price. HMRC says the calculation must be done differently. This can alter the final SDLT bill.
What this rule is about
Multiple dwellings relief, usually called MDR, was a relief for buying more than one home in a single deal. The price could sometimes include something else, such as land that did not form part of the homes.
The legislation calls that other part the remaining consideration. In everyday terms, it is the part of the price left after a fair allocation has been made to the homes in the deal.
The rule determines how much stamp duty is linked to that leftover part.
This is not a current relief for ordinary new purchases. HMRC’s manual says MDR was abolished where a deal completed, or was substantially performed, on or after 1 June 2024.
Special transition rules can still matter. Special transition rules can still matter.
What the official source says
HMRC’s manual says to first calculate the SDLT due on the whole relevant price without an MDR claim. This is the no-relief tax.
Then take the same proportion of that tax as the leftover price represents when compared with the total relevant price for the deal. That is the required share.
- First, work out the SDLT without MDR.
- Next, divide the leftover price by the total relevant price.
- Multiply the no-relief SDLT by that fraction.
- Add that result to the SDLT worked out for the part allocated to the homes.
The point is easy to miss: the leftover part does not get its own separate rate calculation. Instead, it takes a matching share of the tax on the whole deal without relief.
What this means in practice
A fair split of the price still matters. It separates the amount linked to the homes from the amount linked to everything else.
Even after the price has been fairly divided between the homes and everything else, do not calculate the second amount as a separate purchase. Do not treat it separately.
- Keep the total price for the deal clear.
- Record how you split that price between the homes and other property.
- Work out the no-MDR SDLT figure before applying the fraction.
- Check whether another purchase is linked to this one.
Why does this matter? A shortcut can give the wrong answer. The source page specifically warns against simply applying the relevant rates to the leftover amount.
How to analyse it
Start with timing. The relief calculation matters only if the purchase can use the old MDR rules under the transition rules that apply to the particular deal. Completion is not always the only date that counts.
- Check the completion date.
- Check whether the contract was substantially performed earlier, for example because possession was taken or almost all of the price was paid.
- Confirm that the historic MDR rules are available for the deal.
- Identify the total price and the part fairly linked to the homes.
- Identify the leftover part of the price.
- Calculate SDLT without MDR, then apply the statutory fraction.
- If purchases are linked, use the wider totals required for linked purchases.
What changes for linked purchases? The calculation can use totals across the linked purchases instead of looking at one contract alone. HMRC’s manual points to separate guidance for the special transitional rules on linked deals.
Example
Here is a simple illustration, not a rate calculation. Priya’s total price is £800,000. A fair split puts £600,000 to the homes and £200,000 to other property. Assume the SDLT on £800,000 without MDR would be £40,000.
The leftover share is £200,000 divided by £800,000: one quarter. One quarter of £40,000 is £10,000. That £10,000 is the tax linked to the leftover price.
Priya would then add it to the separate MDR calculation for the £600,000 linked to the homes.
It would be wrong to start by applying SDLT rates only to £200,000. That is the shortcut this rule prevents.
Why this can be difficult in practice
The difficult parts are deciding whether MDR remains available under the relevant transition rules and making a fair split of the price between property interests. The arithmetic is usually simple.
Those answers depend on the contract, the property and the transaction dates.
- A deal after 1 June 2024 may need the transitional rules checked before any MDR calculation is used.
- Taking possession or paying nearly all the price can matter before formal completion.
- A linked purchase can change the figures used in the fraction.
- Calling land “extra land” does not by itself show how much of the price belongs to it.
- HMRC’s manual explains HMRC’s view; it is not legislation.
The supplied legal material is also not fully aligned. It contains the former Schedule 6B wording, but the HMRC page says the relief has been abolished.
For a transaction after the statutory material’s recorded currency date, current primary law needs checking.
Key takeaways
- Historic MDR does not tax the leftover price as a separate purchase.
- Use a proportion of the SDLT due without MDR.
- Check timing, fair price splits and linked purchases first.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 6B para 4 — splitting a price between homes and other property
- FA 2003 Schedule 6B para 5 — calculating tax on the part allocated to homes; calculating tax on the leftover part of the price
- FA 2003 section 44 — when a contract is substantially performed for stamp duty
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The supplied statutory extract retains the former Schedule 6B text, while HMRC’s source page says MDR was abolished from 1 June 2024. Current primary legislation should be checked before relying on the rule.
- This source page does not set out the full transitional rules, including the special rules for linked purchases.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The contract, completion date and any date of substantial performance
- A breakdown showing which part of the price relates to homes and which does not
- Details of any linked purchases
- Evidence that the transaction falls within the MDR transitional rules
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION MDR: calculating stamp duty on the non-home part of a purchase [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 6B para 4 - splitting a price between homes and other property https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/4/2025-11-17 - FA 2003 Schedule 6B para 5 - calculating tax on the part allocated to homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/5/2025-11-17 - FA 2003 Schedule 6B para 5 - calculating tax on the leftover part of the price https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/5/2025-11-17 - FA 2003 section 44 - when a contract is substantially performed for stamp duty https://www.legislation.gov.uk/ukpga/2003/14/section/44/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm29945 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The supplied statutory extract retains the former Schedule 6B text, while HMRC's source page says MDR was abolished from 1 June 2024. Current primary legislation should be checked before relying on the rule. - This source page does not set out the full transitional rules, including the special rules for linked purchases. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: MDR: calculating stamp duty on the non-home part of a purchase
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