TQOTW: SDLT: temporary rate-reduction and multiple-dwellings relief.

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.

The Chancellor’s temporary initial rate band of £500,000 applies to transactions taking place between 8th July 2020 and 31st March 2021. HMRC have confirmed their view that this will also apply to transactions liable to the higher-rates for additional (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 3%
The next £425,000 (consideration between £500,001 and £925,000) 8%
The next £575,000 (consideration between £925,001 and £1.5 million) 13%
The remaining consideration (over £1.5 million) 15%

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% = £15,000
Next £425,000 @ 8% = £34,000
Balance of £220,000 @ 13% = £28,600
Total SDLT £77,600

A calculation using Multiple Dwellings Relief together with the temporary reduced rate, would be as follows:

Total consideration £1,145,000 / 3 = £381,666 @ 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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Tax Advice Consultant
0844 892 2470


Roger spent 14 years with the Inland Revenue followed by several years working in the tax department of an accountancy practice. Roger is a member of the Association of Taxation Technicians and, as well as advising on all areas of direct tax, he specialises in Stamp Duty Land Tax.

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