Multiple Dwellings Relief (MDR) let a purchaser buying two or more dwellings in a single transaction calculate SDLT on the average price per dwelling, rather than the total price — a materially cheaper outcome for most multi- dwelling and annexed-property transactions. MDR was abolished for transactions with an effective date on or after 1 June 2024. This page covers the historic calculation, the transitional provisions, and how annex and multi-dwelling purchases are treated now.

Historic MDR calculator (pre-1 June 2024)

What MDR did — the historic mechanic

Before 1 June 2024, MDR let a buyer purchasing two or more dwellings in a single transaction calculate SDLT as follows:

1. Divide the total price by the number of dwellings to get an average price per dwelling.
2. Calculate SDLT on that average price using standard residential rates (and the additional-property surcharge if applicable).
3. Multiply the per-dwelling SDLT by the number of dwellings.
4. Compare against the 1% floor (1% of the total purchase price). SDLT is the higher of the two.

The mechanic materially reduced SDLT on multi-dwelling transactions because it kept more of the price inside the lower SDLT bands. A single £900,000 purchase attracts SDLT at the higher bands; three £300,000 dwellings (average) sit entirely in the lower bands.

Historic worked example — £900,000, three dwellings

A buyer purchased a main house plus two annexes for £900,000 total, before 1 June 2024. Three dwellings.

• Average price per dwelling: £900,000 ÷ 3 = £300,000
• SDLT on £300,000 (standard rates, pre-2025 £250k threshold): £2,500
• × 3 dwellings = £7,500
• 1% floor: £9,000 (1% of £900,000)
• MDR SDLT: £9,000 (higher of £7,500 and £9,000)
• Without MDR: £35,000 (SDLT on £900,000 at standard rates)
• MDR saving: £26,000

Why MDR was abolished

HMRC's own review found that MDR was being widely abused. Two patterns dominated the abuse:

• Contrived annex claims — buyers claiming an existing outbuilding or garage was a "dwelling" to qualify. Tribunal cases suggested a large minority of MDR claims did not stand up to scrutiny.
• Portfolio landlords — buying blocks of flats or clusters in a single transaction and claiming MDR to reduce effective SDLT by 40-60% below the standard-rate calculation.

The Spring Budget 2024 announced abolition. The measure took effect for transactions with an effective date on or after 1 June 2024, with transitional provisions for contracts substantially performed or exchanged before 6 March 2024.

Transitional provisions

MDR can still be claimed for transactions that meet the transitional conditions:

• Contract entered into before 6 March 2024 that has not been varied, assigned, or subject to option/pre-emption after that date, AND
• Substantial performance or completion after 1 June 2024

Purchasers in this narrow transitional window can still elect for MDR at completion. Anyone who completed under a contract exchanged before 6 March 2024 should check with their conveyancer whether the transitional MDR claim was made — if it wasn't, and the 4-year amendment window is still open, an amendment via SDLT return correction can recover the relief.

Current position — post-abolition (from 1 June 2024)

For transactions from 1 June 2024 onwards, SDLT on multi- dwelling purchases uses the standard rate calculation with no per-dwelling averaging. This has three distinct sub-cases.

Case 1 — main house with annex or "granny flat"

Where the annex qualifies as a subsidiary dwelling (broadly, self-contained, with the main dwelling accounting for two-thirds or more of the total value), the whole transaction is treated as a single dwelling. Standard SDLT applies with no additional-property surcharge (assuming it's your only residential property). This is broadly buyer- neutral vs the old MDR position on cheaper annex purchases.

Case 2 — main house with substantial annex (not subsidiary)

Where the annex is self-contained but not "subsidiary" (main dwelling accounts for less than two-thirds of value), the transaction is treated as buying multiple dwellings — the additional-property surcharge (5%) applies to the whole price. This is a materially worse outcome than the old MDR position and catches out many annexed-property buyers post-abolition.

Case 3 — portfolio purchases (2-5 flats/houses in one transaction)

Standard residential SDLT applies to the whole price, plus the 5% additional-property surcharge (assuming you already own another residential property). No relief for the multiple- dwelling nature. On a £900,000 purchase of three £300,000 flats, SDLT is now £80,000 (£35,000 standard + £45,000 surcharge) vs approximately £9,000 under MDR — an 8-9× uplift.

Case 4 — six or more dwellings in one transaction (still eligible for non-residential rates)

Where a single transaction involves 6 or more dwellings, the buyer can still elect to use non-residential SDLT rates instead of residential rates. This election was not abolished alongside MDR. Non-residential rates (2%/5%) are materially cheaper than the additional-property residential rates on large-portfolio purchases — the 6+ election is now the primary planning route for BTL portfolio acquisitions.

What counts as a "dwelling" — the subsidiary-dwelling test

HMRC applies a facts-and-circumstances test. Key indicators:

• Self-contained access (independent front door)
• Own kitchen and bathroom
• Own council-tax banding
• Independent utility supplies where practical
• Physical separation from the main dwelling (not just an internal partition)

Where the annex is shared-access, shared-kitchen, or without its own council-tax band, HMRC will generally treat it as part of the main dwelling. For clearly self-contained annexes, the subsidiary-dwelling test then determines whether the surcharge applies to the whole price.

Post-abolition worked example — same £900k transaction, three dwellings

Same purchase, effective date 1 August 2024 (post-abolition), three self-contained flats bought together as additional property. Standard 2026 rates apply.

• Standard SDLT on £900,000: 0% × £125k + 2% × £125k + 5% × £650k = £2,500 + £32,500 = £35,000
• Additional-property 5% surcharge on £900,000 (above £40k threshold): £43,000 (£125k × 5% + £125k × 5% + £650k × 5% approximately) — actually stacks band-by-band: 5% × £125k + 7% × £125k + 10% × £650k = £6,250 + £8,750 + £65,000 = £80,000
• Post-abolition SDLT: £80,000
• Pre-abolition SDLT under MDR: approximately £9,000
• Uplift: £71,000

Retrospective MDR claims — amendment window

Buyers who completed a qualifying multi-dwelling transaction before 1 June 2024 but did not claim MDR at the time may still amend their SDLT return within 4 years of the effective date. Given the sums involved (often £20k-£100k+), a review by an SDLT specialist is worth doing on any pre-June-2024 multi-dwelling purchase where MDR was not claimed.

Planning for current multi-dwelling purchases

With MDR gone, the primary planning routes are:

1. Structure as a subsidiary dwelling where the annex is genuinely subsidiary (main dwelling worth ≥ 2/3 of total). This keeps the transaction inside the single-dwelling regime with no surcharge.
2. Use the 6+ election for portfolio acquisitions. Where you can bundle 6 or more dwellings into a single transaction, the non-residential-rate election is materially cheaper than the residential-plus-surcharge alternative.
3. Split into separate transactions where feasible — separate contracts for each dwelling avoid the multiple-dwelling analysis, though additional-property surcharge still applies to each.
4. Corporate structuring — buying via a limited company or SPV changes the SDLT profile (15% flat rate on residential over £500k for corporates unless a relief applies). Specialist tax advice is essential.

Frequently asked questions

Does Multiple Dwellings Relief still exist?

No — abolished for transactions with an effective date on or after 1 June 2024. Transitional rules cover contracts substantially performed or exchanged before 6 March 2024 with completion after 1 June 2024.

How was MDR calculated before abolition?

Total price ÷ number of dwellings = average per dwelling. Calculate SDLT on that average, multiply by number of dwellings, compare with 1% floor. Higher figure applies.

Can I still claim MDR retrospectively?

Only for transactions with effective date before 1 June 2024, within the 4-year SDLT amendment window. A specialist SDLT review can identify claims that were missed at completion.

What replaced MDR for annex purchases?

The subsidiary-dwelling test. Where the annex is self-contained but the main dwelling is worth two-thirds+ of the total, it's treated as a single dwelling — no surcharge. Otherwise the additional-property surcharge applies to the whole price.

What counts as a 'dwelling' for SDLT?

Self-contained unit — own front door, kitchen, bathroom, independent access. HMRC scrutinises annex claims carefully. Own council-tax banding is a strong indicator.

Does the abolition affect buy-to-let landlords?

Yes — significantly. Portfolio purchases of 2-5 dwellings now attract full residential SDLT + 5% surcharge. On typical portfolio prices this is a 30-60% uplift vs the old MDR position.

Is MDR the same as the '6 or more properties' rule?

No. The 6+ non-residential-rate election was NOT abolished and remains available. It's the primary planning route for large portfolio acquisitions post-MDR.

Where is the MDR abolition legislation?

Section 12 of the Finance (No. 2) Act 2024. HMRC's SDLT Manual entry SDLTM29900 documents the change and transitional provisions.

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Last reviewed: 21 August 2026. Estimate only — always confirm SDLT with your conveyancer.