SDLT Multiple Dwellings Relief 2026: Abolition and What It Means
Multiple Dwellings Relief used to let buyers of two or more properties in one transaction average the Stamp Duty Land Tax rate across each dwelling. It was abolished for most purchases from 1 June 2024. This guide explains what MDR was, why it ended, the narrow exceptions that remain, and how SDLT is now worked out on multi-property purchases.
Updated 1 July 2026
Key Facts
MDR abolished from:1 June 2024 (most transactions)
Transitional protection:Contracts exchanged on or before 6 March 2024
Applies to:England and Northern Ireland (SDLT only)
Multiple Dwellings Relief (MDR) was a long-standing Stamp Duty Land Tax relief available when a buyer purchased two or more dwellings in a single transaction, or in a series of linked transactions. Rather than paying SDLT on the total price treated as one property, MDR let the buyer divide the total price by the number of dwellings, calculate SDLT on that average price, and then multiply the resulting tax by the number of dwellings — subject to a minimum effective rate of 1% of the total consideration.
Because SDLT rates are banded (with 0% and low rates applying to the first slices of value), averaging the price across several dwellings usually meant more of the total purchase price fell into the lower bands, reducing the overall tax bill compared with taxing it as one large single-dwelling purchase.
The Abolition From 1 June 2024
At Spring Budget 2024, the government announced that MDR would be abolished for transactions with an effective date on or after 1 June 2024, following an external evaluation which concluded the relief was not demonstrating value for money and was increasingly being used for aggressive tax planning rather than its intended purpose of supporting investment in residential property.
A transitional rule protects buyers who had already exchanged contracts on or before 6 March 2024 (the date of the Budget announcement) — these purchasers can still claim MDR even if completion takes place after 1 June 2024, and even if the contract is later varied, as long as the variation is not itself designed to keep the transaction within the transitional protection artificially.
Worked Example: Before and After
Before abolition, a buyer purchasing a main house with a self-contained annexe for a combined £600,000 could, if the annexe qualified as a separate dwelling, apply MDR by treating the purchase as two dwellings at an average of £300,000 each. SDLT on £300,000 falls mostly within the lower residential bands, so the combined MDR bill could be significantly less than SDLT on the full £600,000 taxed as one property.
Since 1 June 2024, the same purchase (outside the transitional protection) is generally taxed as a single residential transaction on the full £600,000 at standard SDLT rates and bands, which produces a noticeably higher bill because none of the averaging benefit is available. Anyone budgeting for a purchase involving an annexe should get an up-to-date SDLT calculation from a conveyancer rather than relying on older MDR-based figures.
The Annexe and Granny Flat Problem
One of the most common (and most disputed) uses of MDR was claiming that a granny annexe, garden building, or self-contained flat within a larger property counted as a separate dwelling, allowing MDR to be applied to the whole purchase. HMRC challenged many such claims where the "second dwelling" lacked genuine self-containment (for example, no separate front door, kitchen or bathroom facilities, or no independent access).
The abolition of MDR removes this planning route for the vast majority of new purchases, meaning buyers of houses with annexes should expect standard SDLT treatment on the combined price rather than budgeting for an MDR-reduced figure, unless they fall within the narrow transitional protection.
Remaining Exceptions
Transactions with contracts exchanged on or before 6 March 2024 (transitional protection)
Purchases of three or more dwellings, which can elect to use non-residential and mixed-use SDLT rates instead of residential rates and the surcharge
Devolved equivalents (LBTT in Scotland, LTT in Wales) which have their own separate multiple dwellings rules unaffected by this change to SDLT
Common Pitfalls
Budgeting using an old MDR calculator or quote. Figures produced before June 2024 for a purchase completing now will significantly understate the SDLT due.
Assuming an annexe still reduces SDLT. Outside the transitional protection, annexes and granny flats generally no longer unlock a lower rate.
Overlooking the three-or-more-dwellings election. Larger portfolio purchases can still benefit from mixed-use rates even without MDR — this is easy to miss.
Frequently Asked Questions
What was Multiple Dwellings Relief?
Multiple Dwellings Relief (MDR) was a Stamp Duty Land Tax relief that applied when a single transaction (or a series of linked transactions) involved buying two or more dwellings. Instead of paying SDLT on the full combined purchase price at the normal rates, the buyer paid SDLT based on the average price per dwelling, then multiplied that tax by the number of dwellings. This usually produced a lower total SDLT bill than taxing the whole purchase price as one property.
Has Multiple Dwellings Relief been abolished?
Yes. MDR was abolished for most transactions with an effective date (usually completion) on or after 1 June 2024, following a government review that found the relief was being used more for tax planning than for its intended purpose of supporting investment in residential property, including build-to-rent housing. There is a transitional rule: contracts exchanged on or before 6 March 2024 could still benefit from MDR even if completion happened after 1 June 2024, regardless of any later variation to those contracts.
Is there any exception where MDR can still be claimed?
A limited exception applies to purchases of three or more dwellings, which can still benefit from a different long-standing relief: SDLT on such purchases can be calculated using the non-residential and mixed-use rates rather than the residential rates, which is often more favourable for buying several unlinked houses or flats in one transaction. Genuine transitional cases where contracts were exchanged before 6 March 2024 may also still qualify for old-style MDR even after the general abolition date.
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How is SDLT calculated now on a purchase of two or more dwellings?
Since the abolition, most buyers of multiple dwellings pay SDLT on the total combined purchase price using the standard residential rates and bands (including the higher rates for additional or company-owned dwellings, where applicable), in the same way as buying a single higher-value property. This generally increases the total SDLT payable compared with the old MDR calculation, because averaging the price across each dwelling and applying multiple sets of nil-rate and lower-rate bands is no longer available.
Does MDR abolition affect buying a house with an annexe or granny flat?
Yes, this was one of the most common uses of MDR before abolition. Previously, if a property had a self-contained annexe that counted as a separate dwelling, buyers could apply MDR to reduce the SDLT on the whole purchase. Since 1 June 2024, this route is no longer generally available, so buyers of a main house with an annexe now typically pay SDLT on the combined price as a single transaction, which can be more expensive than under the old rules.
Does the abolition of MDR affect the 3% (or higher) additional property surcharge?
No, the additional dwelling surcharge (currently a percentage point supplement on top of standard SDLT rates for buyers who already own another residential property, or for companies buying residential property) is a separate rule from MDR and continues to apply according to its own criteria. Abolishing MDR only removed the averaging mechanism; it did not change when the surcharge applies.
What is the mixed-use and non-residential SDLT relief that survived the change?
When a single transaction involves three or more dwellings, buyers can elect to be taxed under the non-residential and mixed-use SDLT rates and bands rather than the residential rates. These rates have a lower top rate than residential SDLT and no 3% surcharge, which can still produce a lower bill for larger portfolio purchases even without MDR, though the calculation and eligibility conditions need to be checked carefully with a conveyancer.
Why did the government abolish Multiple Dwellings Relief?
HMRC's evaluation found that MDR had grown well beyond its original purpose, was subject to widespread incorrect and abusive claims (particularly around annexe and granny-flat arguments), and was not clearly delivering value for money in supporting investment in the private rented sector as intended. The relief was estimated to cost the Exchequer far more than originally projected, prompting its removal at Spring Budget 2024.
Does the abolition apply in Scotland and Wales?
No. MDR was a feature of Stamp Duty Land Tax (SDLT), which only applies in England and Northern Ireland. Scotland has its own Land and Buildings Transaction Tax (LBTT) and Wales has Land Transaction Tax (LTT), each with their own separate multiple dwellings relief rules that were not affected by the SDLT change. Anyone buying multiple dwellings in Scotland or Wales should check the current LBTT or LTT rules separately.
Can I still get a refund of MDR if I overpaid before the abolition date?
If your transaction completed before 1 June 2024 (or you qualify under the transitional rule for contracts exchanged before 6 March 2024) and you believe MDR was correctly due but not claimed at the time, you may still be able to submit an amendment or claim within the normal SDLT time limits, which is generally 12 months from the filing date of the SDLT return. Speak to a conveyancer or tax adviser promptly, as claims made outside the time limit cannot normally be accepted.
Disclaimer: This guide is for general information only and does not constitute personal financial or tax advice. SDLT rules are complex and transitional provisions depend on exact transaction dates — always confirm your position with a conveyancer or tax adviser before exchanging contracts.
