Multiple Dwellings Relief Abolished: What Still Applies to SDLT on Bulk Purchases

For over a decade, Multiple Dwellings Relief was standard advice for anyone buying more than one residential property in a single deal — a block of flats, a house with an annexe, a portfolio bought in one go. It was withdrawn in 2024, and we still get asked at least weekly whether it can be claimed on a purchase going through now. It can't. Here's what changed, why, and what's still on the table.

What Multiple Dwellings Relief used to do

MDR let a buyer acquiring two or more dwellings in a single transaction, or in linked transactions, calculate SDLT on the average price per dwelling rather than the full purchase price, then multiply the resulting tax by the number of dwellings — subject to a minimum effective rate of 1%. Because SDLT is progressive, taxing an average price per unit rather than one large aggregate price routinely produced a materially lower bill, particularly on higher-value multi-unit purchases where the top slice of an aggregated price would otherwise be taxed at the highest marginal rates.

The relief was genuinely useful for the transactions it was designed for: buying a small block of flats, a portfolio of houses in one completion, or new-build units off-plan in a single contract. It was also, over time, stretched a long way beyond that.

Why it was abolished

The relief was withdrawn at Spring Budget 2024 and stopped applying to transactions completing on or after 1 June 2024. The government's own external evaluation of MDR found no strong evidence it was meeting its stated policy objective of supporting investment in the private rented sector, while flagging that a significant share of claims were driven by tax planning rather than genuine multi-unit purchases.

The most common abuse HMRC pointed to was straightforward: buyers of an ordinary single home with a garden annexe, granny flat, or self-contained room over a garage would argue the annexe was a second "dwelling," splitting one house purchase into two for MDR purposes and cutting the SDLT bill — sometimes substantially — on what was, in reality, one family home. A cottage industry of firms offering "no win, no fee" retrospective MDR reclaims grew up around exactly this argument, and a meaningful proportion of those claims did not hold up to scrutiny.

The transitional rules

Abolition wasn't applied with a hard cliff-edge for deals already under way. Relief remained available where contracts were exchanged, or the transaction was substantially performed, on or before 6 March 2024 (Budget day), even if completion happened after 1 June 2024 — provided the contract was not subsequently varied. In practice this protected buyers who had already legally committed to a purchase before the change was announced, while closing the door on anything agreed afterwards. If your contract exchanged before 6 March 2024 and completion is only now going through, it's worth checking whether that transitional protection still applies to your transaction rather than assuming it's automatically lost.

What still reduces SDLT on a bulk purchase

MDR being gone doesn't mean every route to a lower rate on a multi-unit purchase has disappeared. The rule that treats a purchase of six or more dwellings in a single transaction as non-residential property for SDLT rate purposes is separate legislation and was not touched by the 2024 abolition. Buy six or more dwellings in one transaction and the whole purchase is taxed at non-residential rates — generally lower at higher values than the residential scale, and crucially with no 3% additional dwelling surcharge applied at all.

For genuine bulk buyers — a block of six-plus flats, a portfolio acquisition completing as one transaction — this can still be worth a substantial amount, and is frequently overlooked by conveyancers who aren't property-tax specialists and simply apply standard residential rates with the surcharge by default. It is worth deliberately checking on any acquisition of six or more units whether the transaction can be structured to complete as a single purchase rather than split, since splitting it can inadvertently forfeit access to the non-residential treatment.

Below six units, there is no equivalent relief for a straightforward multi-unit purchase; the standard residential rates and, where applicable, the 5% additional dwelling surcharge apply to the full aggregated price. For developers weighing up acquisition structure more broadly, see our guide on SDLT for property developers.

The risk that didn't go away: past claims

Abolition stops new claims; it does nothing to protect claims already made. HMRC has continued actively enquiring into pre-June 2024 MDR claims, with annexe and "granny flat" claims a particular focus, and has been assessing back tax, interest and, where it considers the claim was careless or deliberate, penalties on top. The standard enquiry window is four years from the end of the relevant tax year for an innocent error, extending to six years for carelessness and up to twenty years where HMRC considers the error deliberate.

If you claimed MDR on a purchase completed before June 2024 on the basis that an annexe, granny flat or similar counted as a separate dwelling, it is worth revisiting that claim now, on your own terms, rather than waiting for an HMRC enquiry letter to force the issue. Voluntary disclosure ahead of an enquiry generally produces a materially better penalty outcome than a challenge HMRC initiates itself.

Common questions

Is Multiple Dwellings Relief still available?

No. Multiple Dwellings Relief was abolished for SDLT purposes for transactions with an effective date on or after 1 June 2024. A narrow transitional rule preserved relief for contracts exchanged, or substantially performed, on or before 6 March 2024, provided the contract was not varied afterwards.

Why was Multiple Dwellings Relief abolished?

HMRC's own external evaluation found no strong evidence the relief was achieving its original aim of supporting investment in residential property, while identifying widespread abuse, particularly claims that a garden annexe, granny flat or self-contained room counted as a second dwelling to reduce the SDLT on an ordinary single-home purchase.

Can I still get a lower SDLT rate buying six or more properties in one transaction?

Yes. The rule treating a purchase of six or more dwellings in a single transaction as non-residential property for SDLT rate purposes is separate from Multiple Dwellings Relief and was not abolished. Buyers acquiring six or more dwellings in one go pay non-residential rates on the whole transaction, with no 3% additional dwelling surcharge.

Can HMRC still challenge a Multiple Dwellings Relief claim made before abolition?

Yes. Abolition only stops new claims; it does not close the enquiry window on claims already made. HMRC has been actively enquiring into pre-2024 MDR claims, especially annexe-based claims, and can assess back tax, interest and penalties within the normal four, six or twenty year limits.

This article is general information, not personal tax advice, and tax rules change. Your own position depends on facts we cannot see from here — please take advice before acting on anything above.

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