Q&A: temporary rate-reduction and multiple-dwellings relief

In our regular Q&A series, Croner Taxwise, tax advice consultant Roger Bradbury, explains how multiple dwellings relief would work in a purchase following the temporary stamp duty land tax (SDLT) rate changes

Q. My client is purchasing three residential investment properties from the same seller. I am aware that my client must pay stamp duty land tax at the ‘higher rates’ for additional dwellings (supplementary 3%).

However, I understand that multiple dwellings relief may be available on the purchase, but can you please explain how this would work following the temporary rate changes introduced by the Chancellor in July?

The property values are £530,000, £325,000, and £290,000 respectively.  My client will let-out all of these properties commercially to unconnected parties.

A. The Chancellor’s temporary initial rate band of £500,000 applies to transactions taking place between 8 July 2020 and 31st March 2021. Croner-i have confirmed their view that this will also apply to transactions liable to the higher-rates for additional in the stamp duty land tax manual on temporary reduced rates (SDLTM00055).

A claim for Multiple Dwellings Relief provides for the SDLT calculation to be based on the average price for each property, instead of a single computation based on the combined price.

The calculation based on average price, rather than the combined price, may result in a lower overall SDLT charge with part of the total consideration falling into lower tax bands (Sch. 6B, FA 2003).

The temporary rates and bands currently in force are as follows:

Up to £500,000


The next £425,000 (consideration between £500,001 and £925,000)


The next £575,000 (consideration between £925,001 and £1.5m)


The remaining consideration (over £1.5m)


In your client’s case, the ‘default’ SDLT calculation, without multiple dwellings relief, would be as follows:

Total Consideration £1,145,000

First £500,000 @3% =


Next £425,000 @ 8% =


Balance of £220,000 @ 13% =


Total SDLT


A calculation using multiple dwellings relief together with the temporary reduced rate, would be as follows:

Total consideration £1,145,000 divided by three = £381,666 at 3% = £11,449 SDLT payable in respect of each property, total SDLT payable therefore £34,347.

The net SDLT saving of £43,253 results from £645,000 of the total consideration, chargeable at a combination of 8% and 13% in the first calculation above, becoming chargeable at 3% with the benefit of multiple dwellings relief.

The relief is claimed on the stamp duty land tax return (SDLT1) at ‘Box 9’, by entering the code for the relief, ‘33’, at Box 9 of the return.

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