MDR Abolished for Transactions Completing After 1 June 2024; Tax Calculation

How SDLT was calculated under multiple dwellings relief

Where multiple dwellings relief (MDR) applied, SDLT was not worked out by applying one rate to the whole transaction. Instead, the chargeable consideration had to be split on a just and reasonable basis between the dwellings and any other property or rights, with SDLT calculated separately for each part and then added together. MDR was abolished for transactions completing, or substantially performed, on or after 1 June 2024, subject to transitional rules.

• MDR calculation rules dealt with how to work out SDLT once the relief applied, not whether the relief was available.
• The consideration had to be apportioned fairly between interests in dwellings and any non-dwelling element.
• Residential and non-residential parts could be taxed under different SDLT rules, so each part was calculated separately.
• In some cases, market value rather than the actual price paid was used as the chargeable consideration.
• If rent formed part of the consideration, the normal SDLT rent rules still applied to that element.
• The main practical difficulty was often showing that the apportionment was just and reasonable, especially in mixed or packaged transactions.

Scroll down for the full analysis.

How tax was calculated for multiple dwellings relief under SDLT

This page explains how the SDLT calculation worked where multiple dwellings relief, often called MDR, applied. The HMRC material is about the mechanics of the calculation rather than whether the relief was available in the first place. That matters because MDR did not simply reduce the whole transaction to a single lower rate calculation. Instead, the consideration had to be split, different rates could apply to different parts, and the results were then combined.

The source also makes clear that MDR was abolished for transactions completing, or substantially performed, on or after 1 June 2024, subject to transitional rules. So this calculation is mainly relevant to earlier transactions, and to cases falling within those transitional provisions.

What this rule is about

MDR was a relief for certain transactions involving more than one dwelling. The rule on this page deals with how to calculate the SDLT once MDR applies.

The key point is that a transaction covered by MDR may include:

• consideration attributable to interests in dwellings, and
• other consideration that is not attributable to dwellings.

The legislation required those elements to be dealt with separately. This matters because residential and non-residential elements can be taxed differently. If the transaction includes both, you do not simply apply one set of rates to the total figure.

What the official source says

HMRC says the tax payable is found by calculating and then adding together:

• the tax on the consideration attributable to interests in dwellings, and
• the tax on the remaining consideration, if there is any.

The consideration must be apportioned on a just and reasonable basis. HMRC does not, on this page, prescribe a single formula for doing that. The emphasis is on a fair and supportable allocation.

HMRC also says that the percentage rates applying to the dwelling element and the remaining element are calculated separately and then aggregated. In other words, each part is worked out under its own rules, and the resulting tax amounts are added together.

The source further notes that, for this purpose, chargeable consideration may include market value where the normal consideration is replaced by market value under specific SDLT rules, or where a relevant election has been made. So the starting figure for the calculation is not always the price actually paid in cash.

Finally, where the chargeable consideration includes rent, the normal SDLT rules on rent continue to apply in order to determine the tax chargeable on that rent.

What this means in practice

In practice, the calculation has three main stages.

1. Identify how much of the chargeable consideration relates to interests in dwellings.
2. Identify how much, if any, relates to something else.
3. Calculate the SDLT on each part separately and add the results together.

This means the transaction has to be analysed carefully. A buyer cannot assume that the whole amount paid is treated as residential simply because dwellings are included. Equally, a mixed transaction is not necessarily taxed entirely under non-residential rules just because some non-dwelling property is involved.

The phrase just and reasonable is important. It means the apportionment must reflect the real substance of the transaction in a fair way. A purely artificial split designed to reduce tax would be hard to justify.

The reference to market value also matters. In some SDLT situations, the law substitutes market value for the actual consideration. If that happens, the MDR calculation uses that substituted figure. So the calculation can depend on deemed consideration rather than the contract price.

If rent is part of the consideration, for example under a lease, the rent element is not absorbed into the MDR calculation in some special way. The usual SDLT rent rules still apply to that part.

How to analyse it

A sensible way to approach the issue is to ask the following questions.

• Does MDR apply at all, bearing in mind its abolition for transactions completing or substantially performed on or after 1 June 2024, subject to transitional rules?
• What is the chargeable consideration for SDLT purposes? Is it the actual consideration, or has market value been substituted under another SDLT rule?
• Does the transaction include only dwellings, or does it also include other property or rights?
• If there is a mixed element, what apportionment of the consideration is just and reasonable?
• What rates apply to the dwelling element?
• What rates apply to the remaining element?
• Is any part of the chargeable consideration rent, so that the separate SDLT rent rules must also be applied?

For conveyancers and advisers, the practical task is to make sure the file shows how the apportionment was reached. That might involve valuation evidence, contractual analysis, or both. The source material does not require a specific type of evidence, but a just and reasonable apportionment should be capable of explanation if HMRC asks.

Example

This is only an illustration of the method.

Suppose a transaction qualifies for MDR and includes several dwellings together with some property that is not part of those dwellings. The total chargeable consideration is split between:

• the part attributable to interests in dwellings, and
• the part attributable to the other property.

The split must be just and reasonable. SDLT is then calculated on the dwelling part using the rules relevant to that part, and separately on the remaining part using the rules relevant to that part. The two tax figures are then added together to reach the total SDLT liability.

If the transaction also includes rent, the rent element is calculated under the normal SDLT rent provisions rather than by folding it into a single blended calculation.

Why this can be difficult in practice

The hardest issue is often the apportionment. HMRC’s wording gives a standard, not a formula. In straightforward cases, the split may be obvious. In others, it may be open to debate, especially where the assets are acquired as part of one package and the contract does not allocate values clearly.

Another difficulty is that the chargeable consideration may not be the same as the purchase price. If market value substitution applies, the taxpayer has to identify the correct deemed figure before doing the MDR calculation.

Timing can also matter. Because MDR was abolished from 1 June 2024, subject to transitional rules, some cases will turn on when the transaction completed or was substantially performed, and whether any transitional protection applies.

Finally, where rent is involved, there can be a risk of overlooking the fact that the ordinary SDLT rent rules continue to operate alongside the MDR calculation.

Key takeaways

• Where MDR applied, SDLT was calculated by separating the dwelling consideration from any remaining consideration and taxing each part separately.
• The split of consideration had to be made on a just and reasonable basis, so the allocation needed to be fair and supportable.
• The calculation could depend on market value rather than actual price in some cases, and any rent element was still taxed under the normal SDLT rent rules.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: MDR Abolished for Transactions Completing After 1 June 2024; Tax Calculation

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