Multiple Dwellings Relief (MDR)

Multiple Dwellings Relief (MDR) was a Stamp Duty Land Tax relief available on the purchase of two or more dwellings in a single transaction, or in a series of linked transactions, in England and Northern Ireland. It was provided under section 58D and Schedule 6B of the Finance Act 2003. The relief allowed the SDLT liability to be calculated using the average price per dwelling rather than the total transaction price, often producing significant savings on portfolio purchases, blocks of flats, and properties with self-contained annexes. MDR was abolished for transactions completing on or after 1 June 2024 by the Finance Act 2024, following an HMRC evaluation that found no strong evidence the relief was meeting its original objective of supporting investment in the private rented sector.

How MDR worked

The calculation involved three steps. First, the total purchase price of all dwellings was divided by the number of dwellings to produce the average consideration per dwelling. Second, SDLT was calculated on that average figure using the standard residential rate tables. Third, the resulting SDLT figure was multiplied by the number of dwellings to produce the total tax due. A minimum floor applied: the total SDLT could not be less than 1% of the aggregate consideration for all dwellings. The higher rates surcharge for additional dwellings was added on top where the purchaser already owned another property.

To illustrate: a landlord purchasing four flats for £1,000,000 total (£250,000 each) on the standard residential rates would pay SDLT on the £1,000,000 total without MDR. With MDR, SDLT was calculated on £250,000 per flat and multiplied by four. Since each £250,000 fell into lower rate bands than the £1,000,000 total, the aggregate SDLT was materially lower, producing savings of several thousand pounds on a typical portfolio purchase.

Who MDR applied to

MDR was available to any purchaser, including individuals, companies, and trustees, buying two or more qualifying residential dwellings in a single or linked transaction. It was commonly used by:

Landlords and investors buying blocks of flats or small portfolios in a single contract. Property developers acquiring multiple units off-plan under one agreement. Buyers of large residential properties that included a self-contained annexe, granny flat, cottage in the grounds, or basement flat, provided each unit was "suitable for use as a single dwelling" as a matter of fact. This last category generated the most litigation, with HMRC consistently challenging annexe-based claims and winning the majority of cases.

Why MDR was abolished

The abolition was announced in the Spring Budget on 6 March 2024 and took effect from 1 June 2024. HMRC commissioned an external evaluation that concluded MDR was not demonstrably supporting investment in the private rented sector. The evaluation also identified widespread abuse: claims were frequently made by repayment agents on the basis of questionable annexe eligibility, and HMRC had defeated a steady flow of speculative claims through the tribunal system. The government concluded that the simplification benefit of removal outweighed the harm to legitimate claimants.

The transitional rules

MDR remained available after 1 June 2024 for transactions where a contract was entered into on or before 6 March 2024, regardless of the completion date, provided the contract was not varied after that date. Any variation to the consideration, parties, or terms after 6 March 2024 could disqualify the transaction from the transitional provisions.

For linked transactions spanning the change, where some dwellings were acquired before 1 June 2024 and some after, the post-change transactions are treated as unlinked for MDR purposes, meaning MDR applies only to the pre-change elements.

Late claims for pre-abolition transactions

Purchasers who completed before 1 June 2024 and did not claim MDR on their original SDLT return may still be able to make a retrospective claim. An amended SDLT return can be submitted to HMRC within 12 months of the filing date of the original return, or within four years of the effective date of the transaction in certain circumstances. Professional advice should be obtained before making a late claim, as HMRC scrutinises annexe-based claims closely and an incorrect claim can result in penalties.

Scotland and Wales

MDR was an England and Northern Ireland relief under the SDLT regime. Scotland and Wales operate separate property transaction taxes, Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales, each with their own version of MDR. As of May 2026, LBTT MDR in Scotland has not been abolished and remains available under the Land and Buildings Transaction Tax (Scotland) Act 2013. Wales launched a consultation on LTT MDR following the SDLT abolition; landlords with properties in Scotland or Wales should check the current position with a local tax adviser.

The six-or-more-properties alternative

Where a purchaser acquires six or more dwellings in a single transaction, they can elect to have the transaction treated as non-residential and apply non-residential SDLT rates to the total consideration. This election, which predates and survives the MDR abolition, can produce a lower SDLT liability than the standard residential rates, particularly on high-value bulk purchases. The non-residential election is made on the SDLT return and is separate from MDR.

The abolition of MDR is one of several cost increases that have made building or expanding a property portfolio more expensive since 2022. From 31 October 2024, the higher rates surcharge for additional dwellings increased from 3% to 5%, adding a further cost to all residential portfolio acquisitions. Landlords building a portfolio can model the SDLT cost of any residential acquisition using the August Stamp Duty Calculator, which reflects the current 5% surcharge. For the full history of the relief and a calculation of what MDR would have saved on a specific pre-June 2024 transaction, use the August Multiple Dwellings Relief Calculator.

Frequently asked questions

Was MDR available for a granny annexe?

Before 1 June 2024, MDR was available where a property included a self-contained annexe that was "suitable for use as a single dwelling", meaning it had its own entrance, kitchen, bathroom, and living space, with the capacity to function independently of the main house. HMRC challenged many such claims and won most of the tribunal cases. The abuse of annexe-based MDR claims was one of the reasons the government cited for abolishing the relief.

Can I still claim MDR?

MDR is no longer available for transactions completing on or after 1 June 2024, unless contracts were exchanged on or before 6 March 2024 without subsequent variation. For transactions completed before 1 June 2024 where MDR was not claimed on the original SDLT return, a retrospective claim via an amended return may be possible within the relevant time limits. Take professional advice before doing so.

Does MDR still exist in Scotland?

Yes. LBTT MDR in Scotland has not been abolished and remains available under the Land and Buildings Transaction Tax (Scotland) Act 2013. The calculation method is broadly similar to the former SDLT version, though there are differences in detail. Purchasers of multiple dwellings in Scotland should consult Revenue Scotland guidance.