The end of SDLT multiple dwelling relief is in sight
Multiple Dwellings Relief (MDR) will be abolished for transactions which complete, or which substantially perform, on or after 01 June 2024. Purchasers who exchanged contracts on or before 06 March 2024 remain eligible for MDR regardless of when the transaction completes, provided there is no variation of the contract after that date.
Amongst the big headline announcements of the Spring budget, an announcement that Multiple Dwelling Relief is to be abolished with effect from 01 June 2024 went largely unnoticed, but it has potentially significant and expensive implications for property developers and investors, in particular.
Multiple dwellings relief?
Multiple Dwellings Relief (MDR) will be abolished for transactions which complete, or which substantially perform, on or after 01 June 2024. Purchasers who exchanged contracts on or before 06 March 2024 remain eligible for MDR regardless of when the transaction completes, provided there is no variation of the contract after that date.
What if I have exchanged contracts already but not yet completed my purchase?
As long as you exchanged contracts on or before 06 March 2024, then you will still be able to claim MDR (obviously provided that the property qualifies), irrespective of when completion takes place, as long as there is no variation to the contract after 06 March 2024.
Any contract entered into after 06 March 2024 can only benefit from MDR if it completes or is “substantially performed” (the purchaser has paid substantially all of the consideration specified in the contract), before 01 June 2024.
Is anything replacing MDR?
No, there is not a similar or replacement scheme being introduced. However, the existing rule that allows SDLT on the purchase of six dwellings or more as part of a single transaction to be assessed on commercial SDLT rates remains in place. This should, to a certain extent, mitigate the affect of the loss of MDR for a number of transactions.
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Carl Bate
Founding the firm back in 2015 as a sole practitioner, Carl is an active managing partner and has headed up various departments over the years as the firm has grown. He is at the helm and especially enjoys focusing on the management and development of the business.