Multiple Dwellings Relief: its abolition and the position in each nation

Multiple Dwellings Relief (MDR) was a tax relief that reduced the property tax due when a buyer purchased two or more dwellings in a single transaction, or in a series of linked transactions. A "dwelling" could be a separate flat, a row of cottages, or a self-contained annexe within a larger property, provided each one met the test of a standalone dwelling. The relief mattered most to landlords buying portfolios and to families buying a house with a self-contained annexe, because it changed how the tax was calculated: instead of applying the rates to the whole price, the tax was worked out per dwelling, which usually produced a smaller bill.

For buyers in England and Northern Ireland, where property purchases are taxed under Stamp Duty Land Tax, the relief has ended. HMRC states that MDR is abolished and can no longer be claimed for transactions which complete, or are substantially performed, on or after 1 June 2024¹. The abolition was announced on 6 March 2024, and buyers who had already exchanged contracts were protected².

The position is different in the other two nations. Wales still offers a Multiple Dwellings Relief under Land Transaction Tax, though the minimum rate of tax payable under a claim rose from 1% to 3% of the purchase price for transactions on or after 13 February 2026³. Scotland also retains a Multiple Dwellings Relief under the Land and Buildings Transaction Tax regime, and a 2026 review recommended keeping it in its current form⁴. This page explains each position in turn.

Multiple Dwellings Relief has ended in England and Northern Ireland

Multiple Dwellings Relief was a bulk purchase relief from Stamp Duty Land Tax which applied to the purchase of two or more dwellings in England and Northern Ireland². Rather than applying the residential rates to the entire price paid, the relief allowed the tax to be worked out by reference to the individual dwellings in the purchase, which typically reduced the bill on a portfolio purchase or a property with a self-contained annexe. A minimum rate of tax applied under the relief, set at 1% of the amount paid for the dwellings¹.

The relief is now gone. HMRC's guidance states that MDR is abolished and can no longer be claimed for transactions which complete, or are substantially performed, on or after 1 June 2024¹. The government confirmed the date in its March 2024 consultation outcome: MDR would be abolished for transactions which complete, or which substantially perform, on or after 1 June 2024². "Substantial performance" matters because under SDLT a transaction can become chargeable before formal completion, for example when the buyer pays substantially all of the money or takes possession early. A purchase that reached that point before 1 June 2024 falls on the old side of the line even if the legal completion came later.

For a buyer in England or Northern Ireland purchasing a property with an annexe today, the position is straightforward: the whole price is taxed under the normal SDLT residential rules, with no per-dwelling calculation. The higher rates on additional properties and the main SDLT reliefs that remain available are covered elsewhere on this site.

The abolition did not appear out of nowhere. HMRC had opened a consultation on 30 November 2021 inviting views on options to reform the relief, alongside possible changes to how mixed-property purchases are taxed⁶. The consultation ran alongside an external evaluation of whether the relief was doing what it was designed to do, and the outcome of that work is covered in the section on why the relief was abolished below.

Who can still claim under the transitional rules

Not every purchase straddling 1 June 2024 lost the relief. The government built transitional protection around the date of exchange, not the date of completion. Purchasers who exchanged contracts on or before 6 March 2024 remain eligible for MDR regardless of when the transaction completes, provided there is no variation of the contract after that date². 6 March 2024 was the day the abolition was announced, so the protection covers buyers who had already committed to the purchase before they could have known about the change.

HMRC's guidance sets out the conditions in similar terms: the relief remains available for transactions before 1 June 2024 where contracts were exchanged on or before 6 March 2024, where contracts were substantially performed before 1 June 2024, or where contracts completed before 1 June 2024¹. In practice this gives three routes to the relief for a purchase that crossed the deadline:

• contracts exchanged on or before 6 March 2024, with no variation of the contract after that date²
• contracts substantially performed before 1 June 2024, meaning the transaction became chargeable early¹
• contracts that completed before 1 June 2024¹

The condition about variation is the one that catches buyers out. If the contract was changed after 6 March 2024, for example to alter the price or the property being sold, the protection can be lost and the purchase falls under the abolished regime. A buyer in this position may want to check with the conveyancer who handled the purchase what, if anything, was varied and when.

For purchases that qualify under the transitional rules, the mechanics of claiming are unchanged from the old system: the relief was claimed by entering code 33 in box 9 of the SDLT return¹. If the return has already been filed without the claim, an amendment may still be possible, and the section on claiming and amending returns below covers the time limits that apply in each nation.

Why the relief was abolished

The government's reason for ending the relief was that it was not doing its job. The relief's original objectives were supporting investment in residential property and the private rented sector⁶. An external evaluation was commissioned to test whether it was achieving them, and the conclusion was blunt: the evaluation found no strong evidence that MDR supports these objectives⁶. On that basis, the government concluded that the relief no longer achieved its original aims in a cost-effective way⁶.

The consultation that preceded abolition also reflected concern about how the relief was being used. HMRC invited views not just on reform options but on the relief's interaction with mixed-property purchases, an area where the boundary between residential and non-residential treatment can make a large difference to the tax due⁶. The Scottish review of the equivalent LBTT relief, published in 2026, put the English decision in context: England and Northern Ireland abolished their equivalent MDR under SDLT due to significant abuse, while Wales continues to offer an MDR but has tightened the circumstances in which it can be claimed⁴.

The scale of the relief helps explain why it attracted scrutiny. In Scotland, where the equivalent relief survives, analysis for the LBTT review found that MDR accounted for 7 to 15% of total foregone revenue in the last ten years, and 1 to 3% of total LBTT revenue⁷. Those figures are for Scotland, but they illustrate the order of magnitude of revenue involved in a relief of this kind. The same review noted that residential transactions made up 56% of all relief claims in Scotland in 2015/16, a proportion that had risen to over 95% by 2021/22⁷, a shift that suggests the relief was increasingly being used on residential purchases rather than the bulk investment purchases it was designed for.

Wales: MDR still applies, with a minimum rate of 3%

Wales kept its relief, but tightened it. Multiple Dwellings Relief applies in Wales when you buy a property made up of more than one dwelling in the same transaction, or in linked transactions, with the same buyer and seller involved in all the transactions³. Every dwelling included in the claim must meet the test of being a standalone dwelling, with its own kitchen area, bathroom, space to live and sleep, and independent access³. That test is what determines whether an annexe counts as a second dwelling or is simply part of the main house.

The relief is partial, not a full exemption. Because it is a partial relief, where it is claimed there will always be some Land Transaction Tax owed, and the buyer must pay whichever is higher of the LTT due or the minimum tax calculated³. The minimum rate has changed: it is 3% of the purchase price for transactions on or after 13 February 2026, having been 1% of the purchase price for transactions before that date³. The Welsh Government estimated the change would reduce the value of the relief, or increase total LTT revenues, by between £2.0 million and £2.5 million per year⁸.

Two further rules shape how the relief works in Wales. First, buying more than one dwelling means the buyer needs to consider whether the higher rates of LTT for additional properties apply³; the relief changes the calculation of the main charge, not the surcharge. Second, the relief is not available for transactions where certain other reliefs are being claimed: group relief, reconstruction and acquisition relief, charities relief, or relief for persons exercising collective rights³.

The Welsh Government has also legislated on how annexes are treated. On 7 February 2025, legislation relating to multiple dwellings relief was changed so that dwellings that are subsidiary, meaning worth less than a third of the total value of the transaction, must now be treated as part of the primary dwelling in any main rates residential transaction⁸. For a buyer purchasing a house with a small annexe, this change can determine whether the annexe counts as a separate dwelling for relief purposes at all. The Welsh Government's draft Budget for 2026 to 2027 also announced a new 'equalisation' rule to create per-dwelling parity between multiple-dwelling and single-dwelling transactions liable to the higher residential rates, alongside the increase in the minimum tax rule rate from 1% to 3%⁹.

Scotland: how the relief works under LBTT

Scotland's version of the relief survives intact. Multiple dwellings relief is a partial relief from Land and Buildings Transaction Tax, available when a buyer acquires more than one dwelling in a single transaction or a series of linked transactions¹⁰. It is available on most transactions that involve the purchase of more than one dwelling, whether or not there is also non-residential property in one or more of the transactions¹⁰.

The calculation method is the distinctive part. Under LBTT, the tax is computed using the average consideration per dwelling, subject to a minimum prescribed amount⁵. In outline:

The relief is calculated using residential rates and bands, following the steps laid out in schedule 5, part 4 of the Land and Buildings Transaction Tax (Scotland) Act 2013¹⁰. The relief ensures that in all cases a minimum prescribed amount of tax is charged on transactions involving multiple dwellings¹⁰, so the averaging cannot reduce a bill to nothing.

Two interactions matter for Scottish buyers. The first is with the Additional Dwelling Supplement, the surcharge on additional properties: the MDR does not displace the ADS⁵. A landlord buying three flats with the relief still pays the ADS on top, subject to its own rules. The second is with other reliefs: MDR cannot be claimed if crofting community right to buy relief is available on the transaction¹⁰. The legislation itself confirms the structure, with section 25 of the 2013 Act subject to schedule 5 on multiple dwellings relief alongside the schedules covering the additional amount for second homes, first-time buyer relief and other reliefs¹¹.

The 2026 independent review of LBTT recommended retaining the MDR in its current form, with Revenue Scotland continuing to monitor for avoidance activity⁴. The review's analysis put the relief's cost in context: MDR accounted for 7 to 15% of total foregone revenue in the last ten years and 1 to 3% of total LBTT revenue⁴. For comparison, group relief on non-residential property accounted for 57% of total LBTT revenue forgone in 2023/24⁷, and total revenues foregone to reliefs in Scotland were £104 million in 2020/21, across around 3,030 returns receiving relief¹².

Buying six or more dwellings in Scotland: the ADS exemption

Scotland has a separate rule that changes the tax position on large portfolio purchases. Full relief from the Additional Dwelling Supplement is available on the purchase of six or more residential properties in one transaction, and this applies to both individuals and non-individuals¹³. Where it applies, the purchase is treated as non-residential for LBTT purposes and fully exempted from the ADS⁵. The LBTT payable on such a purchase is at non-residential rates¹³.

The exemption is not a loophole in the relief rules but a deliberate feature of the ADS regime. The ADS exists to apply when a buyer purchases a dwelling which results in them owning more than one dwelling and they are not replacing their main residence¹⁴. It applies to most purchases of residential property in Scotland by non-natural persons, such as corporate bodies, companies and certain trusts, even where they have no other residential properties¹⁴. The charge applies to additional dwelling purchases over £40,000¹⁵. The six-or-more rule carves bulk purchases out of that regime: the Scottish Parliament's Finance and Public Administration Committee noted that transactions involving more than six properties are excluded from ADS¹⁵.

Even though a six-or-more purchase is treated as non-residential and relieved from the ADS, the multiple dwellings relief can still be relevant. Revenue Scotland's guidance states that MDR may also be available on the purchase of six or more residential properties bought in a single transaction, even though these are relieved from the ADS and treated as being non-residential¹⁰. So a bulk buyer in Scotland may benefit from both the non-residential treatment and, where the conditions are met, the averaging calculation.

The 2026 review looked at this exemption too. It recommended maintaining the 6+ dwellings ADS exemption threshold, but reviewing it periodically⁴. The review's analysis found the exemption accounted for 3 to 7% of total foregone revenue since 2018/19⁴, a similar order of magnitude to the MDR itself.

For smaller additional purchases, the ADS rules have their own boundaries. The ADS will not apply if the buyer only owns one dwelling at the end of the effective date, if the consideration is less than £40,000, if the buyer owns an additional property valued at less than £40,000, or if they have disposed of their only or main residence in the 18 months before purchasing a new main residence¹⁴. From 1 April 2024, ADS can be reclaimed if the previous main residence is sold within 36 months¹⁶. Where a claim for MDR has been made as part of the transaction, the amount of ADS reclaimable is the amount paid, based on the average consideration¹⁷.

How to claim the relief or amend a return

The claiming process depends on which tax the purchase falls under. For purchases in Wales, the relief is claimed on the tax return using the correct code. If it was not claimed in the original return, the buyer can amend the return and claim a refund of the extra tax paid, but only within 12 months of the filing date on the original return³. That 12-month window is measured from the filing date, not from the date of the purchase, so a buyer who filed late has a later deadline.

In Scotland, Revenue Scotland's guidance describes two routes: claiming the relief in the original LBTT return, or making an amendment to the LBTT return to claim the relief¹⁰. The amendment route is subject to the statutory 12-month amendment period. For comparison, the same 12-month amendment window applies to other LBTT reliefs: first-time buyer relief must be claimed in the first LBTT return made in relation to the transaction or in an amendment to that return¹⁸, and ADS adjustments can be made by amending the original LBTT return within the statutory 12-month amendment period, or by claiming repayment of an overpayment within five years of the tax return due date¹⁷. The five-year repayment route under section 107 of the RSTPA 2014 is longer than the amendment window, but it applies to overpayments of tax rather than to late relief claims in general.

For England and Northern Ireland, the old SDLT process was to enter relief code 33 in box 9 of the return¹. This now matters only for purchases that qualify under the transitional rules or that completed before 1 June 2024. A buyer who thinks a pre-abolition purchase qualified but was returned without the claim may still be able to amend, and the conveyancer who filed the original return is the natural starting point.

A short checklist for a buyer who thinks they may have missed a claim:

1. Identify which tax applied: SDLT for England and Northern Ireland, LTT for Wales, LBTT for Scotland.
2. Check the transaction date against the rules: for SDLT, whether it completed or was substantially performed before 1 June 2024, or had contracts exchanged on or before 6 March 2024¹.
3. Check whether every dwelling met the standalone dwelling test, where that is part of the claim³.
4. Find the filing date of the original return, since the 12-month amendment window runs from it³.
5. If the window has passed, ask whether a repayment claim is still possible, as it can be for ADS overpayments within five years of the return due date¹⁷.

When the relief can be withdrawn or tax recalculated

Claiming the relief is not always the end of the story. In Scotland, the MDR can be withdrawn in full or in part should an event occur within a relevant period and, had the event occurred immediately before the effective date, the relief would not have been due¹⁰. In other words, if something happens after the purchase that would have meant the relief did not apply in the first place, Revenue Scotland can take the relief back, in whole or in part.

The old SDLT rules worked on a similar principle with a defined window: a buyer might need to fill in another return and recalculate the tax due if the number of dwellings was reduced within three years of the transaction¹. A recalculation of this kind can arise, for example, where dwellings are merged into one, demolished or converted so that the property no longer contains the number of dwellings the claim was based on. Where a further return is needed, the tax is worked out again on the revised basis, and any additional tax becomes payable.

In Wales, the partial nature of the relief shapes the position on payment: because MDR is a partial relief, where it is claimed there will always be some LTT owed, and the buyer must pay whichever is higher of the LTT due or the minimum tax calculated³. The 2025 change on subsidiary dwellings also has a backward-looking relevance to how transactions are treated: dwellings worth less than a third of the total value of the transaction must now be treated as part of the primary dwelling in any main rates residential transaction⁸.

For Scottish buyers, the withdrawal rules interact with the ADS. Where MDR was claimed as part of the transaction, the amount of ADS reclaimable is the amount paid, based on the average consideration¹⁷. And the ADS has its own repayment conditions: repayment can be claimed if the previous property is sold within 36 months of buying the new one, the property sold was the buyer's only or main residence at any time in the 36 months before the purchase, and the buyer has lived in the property they paid ADS on as their only or main residence¹⁴. A buyer whose relief position changes after purchase may therefore face more than one adjustment at once, and the amendment and repayment deadlines are the practical constraint on putting things right.