An increasing number of buyers who have recently purchased residential properties are being contacted by firms claiming that SDLT can be reclaimed. This is often supposedly on the basis that the properties that the buyers have purchased qualify for Multiple Dwellings Relief (“MDR”). While claiming MDR will be suitable for some purchases, there are other instances in which claiming the relief would not be in a client’s best interests.


MDR was introduced in 2011, and allowed purchasers contracting with the same seller for more than one property to aggregate the total cost of the properties bought, and to pay SDLT on each of the properties on the mean value of the properties. MDR reduces the amount of SDLT purchasers would otherwise pay as without the relief transacting for multiple properties would be deemed “linked” transactions, resulting in SDLT being paid on the total consideration due for all the properties being bought (and therefore subject to higher rates.)

Since the 3% SDLT surcharge on the purchase of additional residential property was introduced in 2018, all purchases of properties for which MDR is claimed will be subject to the 3% surcharge. This applies whether the purchaser owned any other property at the time of the purchase, or if they subsequently disposed of a main residence.

When does the opportunity to claim MDR arise?

The purchase of an additional property can arise in several scenarios. For instance, a purchaser could buy several off-plan flats from the same developer. However, it can also apply when a family buys a home which comes with an annex or separate dwelling distinct from the main body of the property being bought.

Whether an annex or separate part of a building can constitute a separate dwelling will depend on whether it can be lived in independently. Broadly speaking a space would appear to qualify if it has its own kitchen and bathroom facilities, and a separate means of access.

If a property does contain a separate habitable area, is it necessarily best to claim MDR?

This depends on a variety of factors. When MDR is claimed, both the properties that are being purchased are charged to SDLT at the additional 3% rate. This applies whether or not at the time of the purchase the purchaser owned any other residential property. This has important effects for whether it is advisable to claim MDR. Consider the following examples (which all assume a purchase price of £1,000,000.00) –

  • Purchase of property with separate dwelling by buyer who owns no other residential property:

This buyer’s SDLT bill without claiming MDR would be £43,750. If they claimed MDR they would pay SDLT on two notional transactions each occurring at £500,000, but these would be charged at the 3% higher rate, meaning that in total £60,000 would be due.


  • Purchase of property with separate dwelling by buyer who already owns another residential property:

As this buyer already owns an additional property, when buying without claiming MDR the 3% surcharge applies anyway, giving a total SDLT bill of £73,750. If this buyer claimed MDR, then as in 1) above, the total due would be £60,000.00.

However, an important caveat to 2) is that if the buyer proposes to dispose of their previous main residence within the 3 years of the date of purchase of the new property, they would not be able to claim back the 3% surcharge if MDR has been previously claimed.


Buyers who are purchasing additional residential properties would be well advised to claim MDR if they do not plan on disposing of the property that they currently own. For buyers who do not own additional residential property, or who know that they will dispose of their main residence (or other residential property) within the 3year time limit, claiming MDR will result in paying additional SDLT.

For companies purchasing multiple units from developers, claiming MDR will continue to be a sound decision. For instance, the SDLT payable on the purchase of three individual flats costing £800,000, £1,000,000 and £1,200,000 from the same developer would be assessed on the total value of £3,000,000, giving an SDLT bill of £363,750, unless the relief was claimed. Utilising MDR, the mean price of £1,000,000 would be the basis on which SDLT would be calculated for each flat, giving three charges of £73,750, and a total of £221,250. Because of the way that that SDLT is charged in bands, this figure is actually lower than the sum of £227,500 if each of the transactions were carried out separately.

For more information, please get in touch with a member of our Property Team.

Edward Chuck

By |2018-09-28T09:47:40+00:00September 28th, 2018|Latest, News/Blog, Property|Comments Off on MULTIPLE DWELLINGS RELIEF – TO CLAIM OR NOT TO CLAIM