What is Multiple Dwellings Relief (MDR)?
MDR is an SDLT relief that applies when two or more dwellings are purchased in a single transaction or in linked transactions. Instead of calculating SDLT on the total purchase price, SDLT is calculated on the average price per dwelling, then multiplied by the number of dwellings.
Because SDLT rates are progressive — meaning higher bands attract higher rates — splitting the total across multiple lower-value calculations results in a significantly lower overall tax bill. MDR was particularly valuable for portfolio purchases and properties with annexes, and remains claimable retrospectively for eligible transactions.
A Worked Example
Consider purchasing 3 flats in a single transaction for £900,000 total (£300,000 each):
- Without MDR: SDLT on £900,000 = £32,500
- With MDR: SDLT on £300,000 average = £5,000 × 3 = £15,000
- Saving: £17,500
Note: a minimum rate of 1% applies to the total consideration under MDR — this floors the saving on very low-value dwellings. In the example above, the 1% minimum would be £9,000, so the MDR calculation of £15,000 applies (as it is higher). This is particularly relevant for buy-to-let investors purchasing multiple units.
When Does MDR Apply?
MDR applies in the following situations:
- Two or more dwellings are purchased in a single transaction — for example, a block of flats or a portfolio of rental properties.
- Two or more dwellings are purchased in linked transactions — for example, buying multiple properties from the same seller within a short period.
- A dwelling is purchased with an annexe or subsidiary dwelling on the same land — for example, a house with a self-contained granny flat.
Important: HMRC abolished MDR for transactions completing on or after 1 June 2024. If your purchase completed before that date, a retrospective claim may still be possible within the 4-year amendment window.
The June 2024 Abolition — What It Means
MDR was abolished by the UK Government with effect from 1 June 2024. The relief had been subject to significant abuse and HMRC compliance activity in the years preceding its removal. However, the abolition is not retrospective — purchases completing before that date can still claim MDR if the original SDLT return did not apply it.
This means there is a live window of eligible claims for purchases between approximately June 2020 and June 2024. If you purchased multiple dwellings or a property with an annexe during that period and MDR was not applied, it is worth investigating. The deadline for the earliest eligible transactions is approaching fast.
Annexes and Subsidiary Dwellings
One of the most common MDR scenarios is purchasing a house with a self-contained annexe — a granny flat, garden flat, or converted garage with its own kitchen and bathroom. If the annexe constitutes a separate dwelling, the purchase may qualify for MDR treatment: SDLT would be calculated on the average value of the two dwellings rather than the total price.
HMRC guidance sets out that a dwelling must be suitable for use as a single dwelling — it needs its own entrance, kitchen facilities, and bathroom facilities. A bedroom above a garage with no kitchen does not qualify. A fully self-contained flat with its own front door, kitchen, and bathroom likely does.
If you believe your property may qualify, you can connect with an SDLT specialist for an assessment, or use the DIY Claim Pack to submit the amendment yourself.
Frequently Asked Questions
Was Multiple Dwellings Relief abolished?
Yes — MDR was abolished for transactions completing on or after 1 June 2024. However, purchases completing before that date can still claim it retrospectively within the 4-year SDLT amendment window.
Does MDR apply if I buy a house with an annexe?
Potentially yes, if the annexe is self-contained with its own entrance, kitchen, and bathroom. Each case depends on the specific facts of the annexe and whether it constitutes a separate dwelling under HMRC's guidance.
Can I still claim MDR if my solicitor didn't apply it?
Yes — if your purchase completed before 1 June 2024 and MDR was not applied on the SDLT return, you can submit an amendment within 4 years of completion to claim the relief retrospectively.