Elizabeth Small quoted in The Times on the abolition of Multiple Dwellings Relief

Tax Partner, Elizabeth Small, has been quoted alongside other industry experts in The Times’ Bricks & Mortar on the upcoming proposed abolition of multiple dwellings relief (MDR).

The article ‘Want a house with an annexe?’ delves into what the announcement means for country houses. Since 2011, MDR has made country houses with annexes, cottages and converted outbuildings more appealing and affordable for buyers as it reduced the amount of Stamp Duty Land Tax (“SDLT”) payable.

MDR differs from the usual Stamp Duty Land Tax (“SDLT”) treatment by averaging the SDLT due across the number of properties that are being bought. Therefore, instead of paying tax on the total purchase price, the tax is calculated on the lower average. As SDLT rates increase as the property price rises, MDR can produce a lower SDLT liability. The MDR is subject to a minimum rate of 1% of the purchase price.

But what is considered an additional dwelling? Elizabeth explains that it is generally considered to be “somewhere where the occupant can shelter behind their lockable front door and be able to live in reasonable comfort, so with cooking and separate bathroom facilities and windows”.

The full article can be read here. Behind a paywall.

From 1 June 2024, property transactions that have not completed will no longer qualify for MDR. If you have concerns or further questions on this topic, please contact Elizabeth Small.