Multiple dwelling stamp duty relief is a provision in stamp duty legislation that was introduced in 2011. If you are buying or are planning to buy more than one residential property in one transaction then multiple dwellings relief can reduce SDLT for you.
When there are a number of properties bought together in the same transaction stamp duty land tax multiple dwellings relief applies which means that your stamp duty land tax amount will be calculated in a different way.
Rather than calculate the stamp duty land tax that is payable on all of the properties in full an average value of all of the included properties will be taken. That average is then used to calculate the amount of stamp duty land tax that is payable on each property which is then added to the total amount due. This can help buyers to be charged a fair rate of stamp duty land tax on each of their properties.
However, the determination of what is classed as a secondary dwelling or additional property can be unclear sometimes, especially when you are an individual purchasing a regular property it is sometimes harder to see that you could be eligible for multiple dwellings relief on SDLT.
What Should Be Considered When Applying For A Stamp Duty Refund For Multiple Dwelling Relief?
If it is not immediately apparent that the property you have purchased is eligible for a stamp duty refund for multiple dwelling relief then there may be another relevant factor that could support your claim. Larger houses with multiple smaller cottages, flats or holiday homes within their grounds could potentially qualify for stamp duty relief for multiple dwellings.
You should look carefully at the property in question does the secondary dwelling such as an annexe have its own lockable entrance and does it have a kitchen or bathroom that is separate from the main residence? These factors will aid you in determining if it is a separate property from the main home.
What Is The Definition Of A Dwelling For Stamp Duty Land Tax Multiple Dwelling Relief?
HMRC does give guidance on what they consider to be a second dwelling when a person wants to claim for stamp duty land tax multiple dwelling relief.
A building counts as a secondary dwelling if it is:
- Used as a single ‘self-contained’ dwelling; or
- It is in the process of being constructed or adapted for habitable use at the time the claim is made.
There is not yet any clear guidance on whether the secondary dwelling must have kitchen and bathroom facilities, lockable doors, connected doorways or separate utility metering. These unclear variables can have strong relevance in defending your stamp duty land tax multiple dwellings relief claim to HMRC.
What Is A Linked Transaction Under Multiple Dwellings Relief SDLT?
Linked transactions happen when a number of properties are purchased by the same person from the same seller or are carried out by a connected person.
It is important to note that the value of all properties that are purchased together in a series of linked purchases or transactions are usually added together before the stamp duty land tax rates are calculated which can potentially carry a higher rate of tax to pay.
However, stamp duty relief for multiple dwellings applies to these linked transactions to reduce the tax payable by taking the average of each property or dwelling and charging the rate that is applicable to the average price.
Who Is Not Eligible To Reclaim Stamp Duty Multiple Dwelling Relief?
Companies who are purchasing property or dwellings that reach above the £500,000 threshold for the 15% SDLT rates are not eligible to reclaim stamp duty multiple dwelling relief as they would not be eligible for any of the reliefs for the 15% higher rate of SDLT.
How Can CapEx Tax Help?
If you think that you may be eligible for multiple dwellings relief on stamp duty land tax payments then contact CapEx Tax Specialists today and our team of tax professionals can help you to assess your situation and make your claim. We can help and advise in all cases get in touch with us today to see how much you may be able to save.
Frequently Asked Questions On Stamp Duty Land Tax For Multiple Dwelling Relief
Any property that can be counted as ‘self-contained’ can be called a dwelling but it must have its own facilities and entranceways to be regarded as a second dwelling. See our main residence guide to see the distinguishable differences between the two types of residential dwellings.
Yes – If you have not claimed multiple dwelling relief in your original tax return then you can amend this up to 12 months after the filing date and file a claim with HMRC. The filing date is usually 14 days after the effective date of the transaction.
Yes – it is but only if the flare rate of 15% SDLT applies to the purchase of the dwellings.
An annexe does usually qualify for stamp duty land tax multiple dwellings relief so long as it can be classed as an entirely independent and separate, self-contained dwelling to the main residence.
If you have already purchased a property there is a 3% stamp duty land tax surcharge on each additional property that you buy after the purchase date of your first property. Exceptions to this include buying a home to replace a current home (e.g in the case of divorce or separation.) If your other properties have a commercial purpose then they are exempt from the 3% surcharge (e.g an office or a shop.)