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Share Article: Abolition of Multiple Dwellings Relief from 1 June 2024

Post by Lida Nguyen

Multiple Dwellings Relief (MDR) is a relief in Stamp Duty Land Tax (SDLT). It is available for a purchaser buying two or more dwellings in a transaction or linked transactions and was introduced in 2011 to support residential property investment and promote private rented sector housing supply. However, an evaluation of MDR carried out as part of HMRC’s Tax Reliefs Evaluation Programme found that there is no strong evidence that MDR has a significant impact on these objectives and nor is it cost effective in meeting them. Statistics from HMRC estimate that from 2022 to 2023 MDR cost £700 million.

The government has therefore decided to bring in legislation to abolish MDR with effect from 1 June 2024.

The change will increase the SDLT payable by individuals purchasing two or more dwellings in a single transaction or linked transactions and apply to transactions with an effective date on or after 1 June 2024.

MDR will continue to apply to contracts which exchanged on or before 6 March 2024 and even where completion of the purchase takes place on or after 1 June 2024 provided there is no variation to the contract after 6 March 2024. It will also continue to apply to contracts which substantially perform before 1 June 2024.

It is expected that this change will simplify the SDLT rules and remove any possibility of incorrect claims under MDR which would result in HMRC having to rectify errors on enquiry.

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