Is Multiple Dwellings Relief still available in 2024 and 2025?

MDR was abolished for transactions with an effective date on or after 1 June 2024. However, transitional provisions apply where contracts were exchanged before 1 March 2024 but completed after 1 June 2024. The Finance Act 2024 abolished MDR for transactions with an effective date on or after 1 June 2024. This means that if you completed a purchase on or after 1 June 2024, MDR is generally not available. However, if you exchanged contracts before 1 March 2024, the transitional provisions allow you to claim MDR under the old rules, even if completion took place after 1 June 2024. This exception is critically important and often overlooked. Relevant legislation: Finance Act 2024, Schedule (MDR abolition); SDLTM29900 HMRC Manual. Example: A buyer exchanged contracts on 15 February 2024 to purchase a property with a self-contained annexe for £1.2 million, completing on 10 July 2024. Under the transitional provisions, MDR can be claimed, potentially reducing SDLT from £64,250 to approximately £3,750. Common mistake: Assuming MDR is never available after 1 June 2024. The transitional provisions for pre-March 2024 exchanges are a vital exception.

Can I still claim MDR on a property I bought before June 2024?

Yes. If you purchased a property with multiple dwellings before 1 June 2024 and did not claim MDR, you may be able to amend your SDLT return or make an overpayment relief claim, subject to time limits. For transactions before 1 June 2024, MDR can be claimed by amending the SDLT return within 12 months of the filing date. If the 12-month amendment window has passed, you can make a formal overpayment relief claim within four years of the end of the tax year in which the transaction took place. This means that transactions dating back several years may still be eligible for MDR claims. Relevant legislation: Schedule 10 Finance Act 2003, Paragraph 34 (amendment); Section 80 FA 1989 (overpayment relief). Example: A client purchased a property with a self-contained annexe in 2022 for £800,000. SDLT of £30,000 was paid without claiming MDR. We amended the SDLT return and secured a refund of £22,500, bringing the SDLT down to £7,500. Common mistake: Assuming that once the 12-month amendment window has passed, nothing can be done. Overpayment relief claims extend the window to four years.

How was MDR calculated before it was abolished?

MDR divided the total purchase price by the number of dwellings, applied SDLT rates to the average price, and then multiplied the result by the number of dwellings. This often dramatically reduced the SDLT payable. Under MDR, the total consideration was divided by the number of dwellings purchased. SDLT rates were then applied to the average price per dwelling. The resulting SDLT was multiplied by the number of dwellings to give the total SDLT payable. This calculation method meant that high-value properties with multiple dwellings could see SDLT reduced to a fraction of the standard liability, because the average price per dwelling fell into lower rate bands. Relevant legislation: Section 58D SDLTA 2003 (as in force before 1 June 2024). Example: A property purchased for £1.5 million with two dwellings (main house and annexe). Without MDR: SDLT = £93,750. With MDR: Average price = £750,000, SDLT on £750,000 = £3,750, total SDLT = £3,750 × 2 = £7,500. Saving = £86,250. Common mistake: Not understanding that MDR applied to the average price per dwelling, not to each dwelling's individual price. This is why MDR produced such dramatic savings on high-value properties.

What counts as a 'dwelling' for MDR purposes?

A dwelling is a building or part of a building that is suitable for use as a single residential unit. It must have the facilities necessary for independent living, including kitchen, bathroom, and living/sleeping accommodation. For MDR purposes, a dwelling is defined as a building or part of a building that is suitable for use as a single residential unit. The key test is whether the accommodation is suitable for independent living. An annexe with its own kitchen, bathroom, and living area is likely to qualify. A study or spare room within the main house is not a separate dwelling. The physical characteristics and facilities of the accommodation are what matter, not the buyer's intended use. Relevant legislation: Schedule 4ZA Finance Act 2003, Paragraph 7 (meaning of 'dwelling'); SDLTM00365 HMRC Manual. Example: A property includes a main house and a converted outbuilding with kitchen, bathroom, living area, and bedroom, with its own entrance. The outbuilding is likely to be a separate dwelling for MDR purposes. A room within the main house used as a 'granny flat' but without separate facilities is not. Common mistake: Treating any additional living space (e.g., a spare bedroom, study, or games room) as a separate dwelling. The accommodation must be suitable for use as a separate residential unit.

How long do I have to claim MDR on a past transaction?

You can amend your SDLT return within 12 months of the filing date. After that, you can make an overpayment relief claim within four years of the end of the relevant tax year. There are two routes to claiming MDR on a past transaction. First, you can amend the SDLT return within 12 months of the filing date (the date the return was submitted). This is the simplest route. Second, if the amendment window has passed, you can make a formal claim for overpayment relief under Section 80 of the Finance Act 1989. This claim must be made within four years of the end of the tax year in which the transaction took place. For example, a transaction in June 2021 (tax year 2021/22) can be claimed until 5 April 2026. Relevant legislation: Schedule 10 Finance Act 2003, Paragraph 34 (amendment); Section 80 FA 1989 (overpayment relief). Example: A client purchased a property with an annexe in August 2021. The SDLT return was filed in September 2021. The 12-month amendment window expired in September 2022. However, the overpayment relief claim window is open until 5 April 2026. We successfully claimed MDR and secured a refund of £48,000. Common mistake: Assuming the 12-month amendment window is the final deadline. Many people miss the four-year overpayment relief window, losing out on significant refunds.

SDLT Advisory › Reliefs

Multiple Dwellings Relief (MDR)

MDR was abolished from 1 June 2024, but transitional provisions and historical claims mean this relief is still highly relevant. Find out if you can still benefit.

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Multiple Dwellings Relief was one of the most valuable SDLT reliefs available, allowing buyers of two or more dwellings in a single transaction to calculate SDLT based on the average price rather than the total. Although MDR was abolished for transactions on or after 1 June 2024, transitional provisions may still allow claims, and many past transactions may still be eligible for a reclaim.

The Abolition of MDR from 1 June 2024

The Finance Act 2024 abolished Multiple Dwellings Relief for transactions with an effective date on or after 1 June 2024. This means that buyers of properties with multiple dwellings (such as a house with an annexe) can no longer claim MDR on new transactions. However, this change does not affect transactions that completed before 1 June 2024.

Transitional Provisions

Where contracts were exchanged before 1 March 2024 but completed on or after 1 June 2024, the transitional provisions allow MDR to be claimed under the old rules. This is an important exception that many buyers and conveyancers are unaware of. If you exchanged before 1 March 2024, you should check whether MDR applies to your transaction.

Reclaiming MDR on Past Transactions

If you purchased a property with multiple dwellings before 1 June 2024 and did not claim MDR, you may still be able to amend your SDLT return or make an overpayment relief claim. The time limit for amending an SDLT return is 12 months from the filing date. After that, an overpayment relief claim can be made within four years of the end of the relevant tax year. We have helped clients reclaim significant amounts of SDLT through late MDR claims.

How MDR Was Calculated

Under MDR, where two or more dwellings were purchased in a single transaction, SDLT was calculated by dividing the total consideration by the number of dwellings, applying SDLT rates to the average, and then multiplying by the number of dwellings. This often resulted in a dramatically lower SDLT liability, particularly for high-value properties with annexes.

Key Points

What You Need to Know

MDR was abolished for transactions with an effective date on or after 1 June 2024
Transitional provisions apply where contracts were exchanged before 1 March 2024
Past transactions may still be eligible for MDR claims via SDLT return amendment or overpayment relief
SDLT returns can be amended within 12 months of the filing date
Overpayment relief claims can be made within four years of the relevant tax year

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