Use our Land Transaction Tax calculator to calculate multiple dwellings relief for any appropriate properties in Wales.
The calculations are based on rates shown here. The official WRA calculator is here.

Read the article below for how determine whether a property is suitable as a multiple dwelling.

Identifying Whether a Property Can Be Classified as a Multiple Dwelling for Land Transaction Tax in Wales

When buying property in Wales, particularly for investment or development purposes, understanding how land transaction tax (LTT) works is crucial. One area that often causes confusion is multiple dwellings relief (MDR). Knowing whether your property can be classified as a multiple dwelling is key to taking advantage of potential tax savings. This guide will help you identify if your property meets the requirements for MDR under LTT regulations in Wales.

What Is a Multiple Dwelling?

The concept of a “multiple dwelling” encompasses various situations. Essentially, a property can be considered a multiple dwelling if it contains more than one self-contained unit. A “dwelling” typically refers to a space designed for use as a separate residence, with its own facilities, such as a kitchen, bathroom, and sleeping areas. Here are some examples of properties that may be classified as multiple dwellings:

• A block of flats or apartments
• A house subdivided into separate flats or self-contained units
• A property with an annexe that functions as a self-contained home
• Multiple houses bought in a single transaction

Understanding what qualifies as a dwelling is fundamental to determining if a property can be classified as a multiple dwelling for MDR purposes.

Key Factors to Identify a Multiple Dwelling

There are certain characteristics and conditions to consider when deciding if a property falls under the definition of a multiple dwelling for LTT purposes. Use the following checklist to determine if your property qualifies:

Checklist for Identifying a Multiple Dwelling

1. Self-Contained Units:
   • Does each unit have its own kitchen and bathroom?
   • Can each unit function independently as a separate living space?
   • Example: A converted house with two separate flats, each with its own facilities, would be considered multiple dwellings.
2. Separate Entrances and Living Spaces:
   • Does each unit have its own separate entrance, either internal or external?
   • Are there shared common areas (such as hallways), but each unit retains independent access?
3. Annexes:
   • Is there an annexe that functions independently of the main dwelling?
   • Does the annexe provide basic living facilities like a kitchen and bathroom?
   • Note: An annexe does not need to have a separate postal address but must be capable of being lived in independently.
4. Purchasing Multiple Properties in One Transaction:
   • Are multiple properties being purchased in a single transaction?
   • Example: Buying a row of terrace houses or multiple flats within a building in a single transaction counts as multiple dwellings.

If you can check off all applicable conditions in the list above, your property may be classified as a multiple dwelling for LTT purposes, making it eligible for MDR.

Examples of Multiple Dwellings

Converted Buildings

• Description: A building that has been converted into several flats, where each flat has a kitchen, a bathroom, and is accessible independently.
• Example: An old townhouse converted into three separate apartments, each with its own entrance and living facilities, would qualify as multiple dwellings.
• Key Requirement: Each flat must be capable of being lived in independently and have all the necessary amenities.

Row of Houses

• Description: Purchasing more than one house in a single transaction.
• Example: Buying three terraced houses or semi-detached homes in a single deal would mean that each property is considered a separate dwelling under MDR.
• Relevance: This is particularly relevant for investors or developers, as purchasing multiple properties in one go can offer substantial tax savings through MDR.

Detached House with Annexe

• Description: A detached house that has a self-contained annexe with essential living facilities.
• Example: If a property has a converted garage or a purpose-built annexed structure that includes a bedroom, kitchen, and bathroom, it could be considered a separate dwelling.
• Key Requirement: The annexe must provide an independent living experience, meaning it can be used as a separate home without relying on the main building.

Example floor plans for houses with annexes which can be classified as multiple dwellings.