Conveyancers rejoice: Multiple Dwelling Relief abolished
Multiple Dwelling Relief scrapped
Chancellor Jeremy Hunt announced the abolition of Multiple Dwelling Relief in his Spring Budget. Our Head of Property Mark Laird explains what Multiple Dwelling Relief is and why few conveyancers will be sorry to see it end.
What is Multiple Dwelling Relief?
Multiple Dwelling Relief is a discount rate of Stamp Duty Land Tax paid by buyers acquiring more than one dwelling in the same property transaction. The SDLT payable will be calculated by:
- Dividing the total price paid by the number of dwellings.
- Work out the SDLT due on this figure.
- Multiplying the amount of tax due by the number of dwellings.
- If this is less than 1% of the consideration paid, then the tax payable would be 1% of the price paid.
The rate of SDLT payable when Multiple Dwelling Relief is applicable is often much less than when the standard rate of SDLT is payable.
What is a dwelling?
For the purpose of SDLT a building will be considered a dwelling if it is used as, suitable to be used as or is in the process of being adapted for use as a single dwelling.
A self-contained annexe or outbuilding may be considered a separate dwelling but this will not always be the case. An annexe or outbuilding is unlikely to be considered a separate dwelling if:
- It is not self-contained.
- It does not have a separate entrance.
- It does not have separate washing and kitchen facilities.
- It does not have a separate postal address.
- It is not billed separately for electricity, gas, water and/or council tax.
- The utilities cannot be turned off separately to those in the main dwelling.
When is Multiple Dwelling Relief abolished?
Multiple Dwelling Relief will end on 1 June 2024. Buyers will still be able to claim the Relief if they have already contracted to purchase multiple dwellings prior to 6 March 2024 as long as there are no variations made to the legal agreement following this date.
Can I still claim Multiple Dwelling Relief after 1 June 2024?
Most buyers will no longer be able to claim Multiple Dwelling Relief after 1 June 2024. An exception has been made for buyers already contractually obligated to purchase multiple dwellings prior to this date. Buyers who have not yet exchanged contracts on a purchase of multiple dwellings must complete before 1 June 2024 if they wish to benefit from the Relief.
Conveyancers Rejoice?
Many residential conveyancers will be happy to see the back of Multiple Dwelling Relief with many firms feeling they have been the target of unjustified negligence claims. Specialized claims companies were set up to pursue action against firms who were alleged to have misadvised clients on the Stamp Duty Land Tax payable when purchasing properties which may have qualified for the Relief.
Residential property & conveyancing team
Our specialist property lawyers have decades of experience in assisting with purchases of residential property and assisting clients in identifying the correct level of SDLT payable for their purchase. To enquire about our residential property and conveyancing services please call us on 033 3344 9600 or simply email [email protected] with your request.
Author: Mark Laird, property.
