Stamp duty on a block of flats: HMRC’s multiple homes example
In brief
HMRC’s historic example treats a freehold block of 20 flats as 20 separate homes for the multiple dwellings relief calculation. The price is averaged, but a minimum charge and extra rates may still apply.
- £2.5 million divided by 20 gives £125,000 per flat
- The historic minimum result was 1% of the relevant price
- Check the transaction date before relying on this example
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty on a block of flats: HMRC’s multiple homes example
Stamp duty on a block of flats: HMRC’s multiple homes example
Buying a whole block of flats can look like one property deal. HMRC’s historic example instead splits the price across the separate homes. Although splitting the total price across separate homes can change the stamp duty calculation, a minimum charge and extra rates may still leave the buyer with a large bill. The outcome can be substantial.
What this rule is about
This page explains a historic HMRC example about multiple dwellings relief: the relief for buying more than one home at once. It is not a current rate guide. The date of your deal matters.
In HMRC’s example, a buyer acquires the freehold of a new block containing 20 flats for £2.5 million, with no headlease and no flat held on a long lease. That is important.
Why does that matter? HMRC treats the freehold as if the buyer had bought an interest in each flat. So the calculation starts with 20 homes, not one £2.5 million property.
What the official source says
HMRC says this is a relevant transaction for the historic relief because it includes more than one home. The total price is divided by the number of homes before the tax calculation is made.
- The total price is £2.5 million.
- There are 20 flats.
- £2.5 million divided by 20 is £125,000.
- HMRC says that average was below the normal 0% stamp duty threshold used in its example.
- A minimum rate under the historic relief still applied.
- If the other conditions were met, the relief could be claimed.
The legislation then required a minimum result: if the averaged calculation produced less than 1% of the amount paid for the homes, the tax became 1% instead. This was the floor.
HMRC also says that, in almost all examples like this, the higher rates for additional homes would apply when the transaction met the higher-rates conditions. Its manual describes the historic higher rate as adding 3% to the standard rates.
- The manual says that higher rate began for deals effective on or after 1 April 2016.
- It says a non-resident buyer may face a further 2% addition.
- The manual says that non-resident rates began for deals effective on or after 1 April 2021.
- Those figures describe the example’s historical setting.
What this means in practice
The relief could reduce the rate applied to each flat when averaging was available, but it did not make a large block purchase tax-free. A minimum charge remained. Averaging could reduce the rate that applied to each flat. The minimum charge stopped the result falling below 1% of the price allocated to the homes.
For this example, 1% of £2.5 million is £25,000. That is the minimum result under the historic relief calculation, before considering whether higher rates changed it.
Here is the part people can miss: relief and higher rates were not necessarily alternatives. Where the deal was a higher-rates transaction, the legislation required the relief calculation to take account of those higher rates rather than disregarding them. They were not necessarily alternatives.
- Do not assume the average price is the final answer.
- Check whether the historic minimum charge applies.
- Check higher-rate conditions separately.
- Check tax residence separately too.
- Keep the facts about every flat and lease.
How to analyse it
Start with the date. A manual example cannot tell you which version of the law applies to a different transaction.
- Confirm the effective date of the purchase.
- List the flats and any other property included.
- Check whether the freehold is subject to long leases or a headlease.
- Work out whether the historic relief rules were available then.
- Divide the relevant price by the number of qualifying homes.
- Apply the historic minimum calculation where it applies.
- Test the higher-rate rules for the buyer and the purchase.
- Test whether the non-resident rules apply.
What actually decides the result? It is not simply the fact that a building has 20 front doors. The legal interests being bought, the buyer’s status, and the date can all alter the answer.
Example
HMRC’s illustration uses a £2.5 million freehold block with 20 flats. The average is £125,000: £2.5 million divided by 20. On the normal rate bands used in the example, that average fell in the 0% band.
Yet the historic minimum rate meant tax did not fall to zero. One per cent of £2.5 million is £25,000. If higher rates applied, the result could be higher still. A non-resident addition could increase it again.
That is why the average figure is useful, but incomplete.
Why this can be difficult in practice
You might think that buying one freehold means there is only one property for stamp duty. HMRC’s example says otherwise for this historic relief calculation. Each flat must be considered as part of the overall deal.
The source also leaves important facts open. It says the other relief conditions must be met, but does not explain them. Nor does it identify the buyer.
- A long lease can affect whether an interest counts for the relief.
- A headlease can change the analysis.
- A company and an individual may face different higher-rate tests.
- Non-resident status is a separate statutory question.
- Current law may differ from the manual’s historical example.
Key takeaways
- HMRC’s example divides £2.5 million across 20 flats.
- The historic relief had a 1% minimum tax charge.
- Higher and non-resident rates could increase the result.
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 section 55 — sets the residential stamp duty rate bands
- FA 2003 section 58D — allows multiple dwellings relief to be claimed
- FA 2003 Schedule 6B para 2 — identifies transactions involving two or more homes
- FA 2003 Schedule 6B para 4 — sets the relief calculation for multiple-home purchases
- FA 2003 Schedule 6B para 5 — averages home values and sets the minimum tax
- FA 2003 Schedule 4ZA para 1 — applies higher stamp duty rates to qualifying transactions
- FA 2003 Schedule 4ZA para 5 — defines higher-rate transactions involving several homes
- FA 2003 section 75ZA — adds rates for non-resident land transactions
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 source does not give the transaction date, buyer type, residence status, or all facts needed to decide the final tax bill.
- Multiple dwellings relief is highly date-sensitive. The current availability of the historic relief and any transitional rules must be checked against official legislation for the transaction date.
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 effective date for stamp duty purposes.
- Details of every flat and any lease affecting it.
- The price and any amount allocated to non-home property.
- The identity and tax residence status of each buyer.
- Evidence relevant to any higher-rate conditions.
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 Stamp duty on a block of flats: HMRC’s multiple homes example [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 section 55 - sets the residential stamp duty rate bands https://www.legislation.gov.uk/ukpga/2003/14/section/55/2025-11-17 - FA 2003 section 58D - allows multiple dwellings relief to be claimed https://www.legislation.gov.uk/ukpga/2003/14/section/58D/2025-11-17 - FA 2003 Schedule 6B para 2 - identifies transactions involving two or more homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/2/2025-11-17 - FA 2003 Schedule 6B para 4 - sets the relief calculation for multiple-home purchases https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/4/2025-11-17 - FA 2003 Schedule 6B para 5 - averages home values and sets the minimum tax https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/5/2025-11-17 - FA 2003 Schedule 4ZA para 1 - applies higher stamp duty rates to qualifying transactions https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/1/2025-11-17 - FA 2003 Schedule 4ZA para 5 - defines higher-rate transactions involving several homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/5/2025-11-17 - FA 2003 section 75ZA - adds rates for non-resident land transactions https://www.legislation.gov.uk/ukpga/2003/14/section/75ZA/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/sdltm29970 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 source does not give the transaction date, buyer type, residence status, or all facts needed to decide the final tax bill. - Multiple dwellings relief is highly date-sensitive. The current availability of the historic relief and any transitional rules must be checked against official legislation for the transaction date. 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: Stamp duty on a block of flats: HMRC’s multiple homes example
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