Multiple Dwellings Relief (MDR) to be abolished

The Stamp Duty Land Tax (SDLT) relief know as Multiple Dwellings Relief (MDR) will be removed for completions taking place after 1 June 2024. Currently, where multiple properties are purchased at the same time, MDR applies to reduce the rate of SDLT payable.

Property transactions with contracts which exchanged on or before 6 March 2024 will continue to benefit from the relief regardless of when completion takes place.

The simplest and cheapest way to improve compliance to a rule is to abolish the rule itself.  And this is exactly what they have done.  Why ask HMRC to do their job when it is so simple to take it off their desk in the first place – especially if it will raise you more money in the process.

Whether the Government likes it or not, landlords and the rental market play a critical role in the housing market as many people either cannot afford to buy a home or are not in that market as they will only be there for a short period of time for work. 

What makes this especially harsh is that it will deter landlords from buying multiple homes in the same block of flats which they would let to families who are in desperate need of a place to live.  Whilst not universally true, the Landlords that we work with in this space are able to provide better services to the families that live there because they own the whole building.   

Of course, buyers of 6 or more residential properties will still be able to benefit from the non-residential rates of SDLT – should that produce a better result.  Equally, the non-residential rates are available if you buy a mixed-use property – a commercial ground floor with a flat above for example.  But this change still creates an unnecessary barrier.

SDLT is now very expensive, with rates being as high as 17% in extreme cases.  It really is unclear how this tallies with the Government’s stated love for house building and home ownership.  Maybe one day they will explain. 

What next?

if you have any questions, please do not hesitate to contact a member of the team at hello@gravita.com.

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