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Multiple Dwellings Relief (MDR) Is Gone – What Now?
From 1 June 2024, Multiple Dwellings Relief (MDR) was officially withdrawn. Once a valuable Stamp Duty Land Tax (SDLT) benefit, MDR allowed property buyers to pay tax based on the average value of each dwelling in a bulk purchase, resulting in significantly reduced SDLT bills. While it was designed to support bulk acquisitions like blocks of flats or property portfolios, it was increasingly used for private homes with annexes or “granny flats.”
Now, any qualifying purchase must pay SDLT based on the full transaction value, without the benefit of averaging.
Still Some Relief – But It’s Limited
If contracts were exchanged before 6 March 2024, even if completion occurs after 1 June, MDR can still apply. This gives a narrow window for off-plan purchases or deals already underway.
For those acquiring six or more residential properties in a single transaction, the “six-pack rule” still allows the use of non-residential SDLT rates, capped at 5%. While this is higher than the 1% many enjoyed with MDR, it still offers some savings compared to standard residential rates.
Major Impacts for PBSA Investors
Purpose-built student Accommodation (PBSA) investors were among the biggest users of MDR. Without it, typical SDLT costs have jumped significantly—from 1% to potentially 5% or more. This change may alter investment yields and pricing models, especially for portfolios with lower-value units.
A Shift Toward Share Purchases
With stamp duty land tax (SDLT) now more expensive, many investors are choosing to use corporate structures. Instead of buying property directly, they buy shares in a company that owns the property. This way, they only pay stamp duty at 0.5%, which is much lower than the SDLT on a direct property purchase. However, this option can be complicated. It requires:
- Thorough due diligence on the company being acquired
- Consideration of potential capital gains tax liabilities
- Ongoing corporate compliance and administration
Other Investment Structures on the Rise
As the market adjusts, structures like offshore property unit trusts and collective investment vehicles are gaining attention. These entities offer more flexible tax planning and can reduce exposure to double taxation or SDLT.
Key Takeaways
- MDR ended on 1 June 2024, increasing SDLT on multi-unit property deals.
- Pre-March 2024 contracts may still qualify for MDR.
- PBSA investors face higher costs unless using corporate wrappers.
- Share purchases and offshore vehicles may offer better tax outcomes.
- New strategies now require deeper planning, due diligence, and advice.
If you’re considering a property portfolio purchase or want to restructure your investment approach post-MDR, professional guidance is more important than ever. Let me know if you’d like help creating a checklist or financial forecast under the new SDLT rules.