Common SDLT Reliefs
(SDLT Classifications, Reliefs and Exemptions)

Key Points:

  • First-Time Buyer Relief: Offers tax savings for first-time homebuyers, subject to specific conditions.
  • Multiple Dwellings Relief: Reduced SDLT for purchases involving multiple homes, abolished in June 2024.
  • 15% Rate Relief: Exempts certain entities from the higher SDLT rate for residential property purchases.

Main Principles:

  • First-Time Buyer Relief: Encourages homeownership by reducing tax for first-time buyers meeting specific criteria.
  • Multiple Dwellings Relief: Aimed at property development, allowing SDLT calculation based on the average dwelling price.
  • 15% Rate Relief: Supports beneficial investments in rental, development, and charitable housing by exempting from the higher tax rate.

First-Time Buyer SDLT Relief

(SDLT Classifications, Reliefs and Exemptions>Common SDLT Reliefs)

First-Time Buyer SDLT Relief, introduced in 2017, helps make buying a first home more affordable by offering tax savings, but it requires buyers to meet specific conditions such as being an individual first-time buyer purchasing a single residential property for under £625,000 to use as their main residence.

Introduced in 2017, the First-Time Buyer Relief on SDLT aims to make homeownership more accessible for first-time buyers in England and Northern Ireland. It offers significant SDLT savings, easing the financial burden on individuals stepping into the property market. However, this relief comes with specific conditions and rules, as outlined in Schedule 6ZA to the Finance Act (FA) 2003.

Eligibility Criteria for Property Purchase Relief

Individual Buyers Only: The relief is exclusive to individual purchasers. In cases of joint purchases, every party involved must be a first-time buyer. Companies or LLPs are not eligible for this relief.

Example: Alexander and his company, Transaction Square, are jointly purchasing a property. They cannot claim this relief because one of the buyers is a company.

Single Dwelling Purchase: The relief is applicable only to the purchase of a major interest in one dwelling. Transactions that involve purchasing multiple dwellings at once are ineligible.

Example: Mr. and Mrs. Andrew are buying two properties in one transaction. Even if the combined value is below £625,000, they cannot claim this relief because they are purchasing multiple dwellings.

No Previous Ownership: Eligible buyers must never have owned a freehold or leasehold interest in a residential property anywhere in the world.

Example: Michael owns a rented dwelling. He is ineligible for the relief when purchasing a new property because he has previously owned a residential property.

Residential Purpose: The property being purchased must be intended for residential use. Properties intended for commercial purposes do not qualify for the relief.

Example: Linda is purchasing a commercial property. She cannot claim the relief, even though she is a first-time buyer, because the property is not intended for residential use.

Main Residence Intention: The property should be intended as the buyer’s only or main residence. If the property is not intended to be the main residence for all buyers involved, the relief is not applicable.

Example: Harry and Megan are jointly buying a property, but only Harry intends to use it as his main residence. They do not qualify for the relief because both buyers must intend to use it as their main residence.

Price Threshold: The purchase price of the property must not exceed £625,000.

Example: Mr. Paul purchases a property for £750,000. He is ineligible for the relief due to the value of the property exceeding the £625,000 threshold.

Non-Linked Transactions: The relief is generally not available for linked transactions. An exception exists if the linked transactions involve the purchase of a garden, grounds, or land that benefits the dwelling and the total consideration does not exceed £625,000.

Example: A husband and wife buy a house and its garden in separate transactions. If the combined consideration for the house and garden is below £625,000, they can claim the relief.

Scenarios Where Buyers May be Caught Out:

  1. Investment Property Prior to First Home: If a first-time buyer purchases an investment property before buying their first home, they would be ineligible for the relief as they no longer meet the criteria of not having previously owned a property.
  2. Buy-to-Let Properties: First-time buyers purchasing a property with the intention to rent it out do not qualify for the relief, as it must be intended as their main residence.
  3. Mixed-Use or Commercial Properties: Properties that are not exclusively residential, or are used for commercial purposes, do not qualify for first-time buyer relief.

SDLT Rates for First-Time Buyers as of 1 February 2024:

  • UK Residents: 0% on the first £425,000 and 5% on the remainder up to £625,000.
  • Non-UK Residents: 2% on the first £425,000 and 5% on the remainder up to £625,000, with a 2% surcharge applying to all rates.

Claiming the Relief:

  • The relief must be claimed through the SDLT return, using code 32 in the reliefs field.
  • Responsibility for submission and payment of SDLT lies with the buyer, often facilitated by a solicitor or conveyancer.

Conclusion: First-Time Buyer SDLT Relief is a valuable tool for individuals looking to own their first home, offering significant savings. However, it’s important to understand the eligibility criteria and the implications of various property types and purchase scenarios. 

Multiple Dwellings Relief. Abolished 1 June 2024. (SDLTM29900

(SDLT Classifications, Reliefs and Exemptions>Common SDLT Reliefs)

Abolished as of 1 June 2024.

Financial Impact on the Treasury: The primary reason for the abolition of MDR is its significant cost to the Treasury, amounting to £700 million annually in lost revenue.

  • Failure to Meet Objectives: An external evaluation commissioned by HMRC in February 2023 concluded that MDR has not been effective in achieving its intended goal of supporting investment in the private rented sector (PRS).

Impacts of Abolition

  • Institutional Investors: The abolition is expected to have minimal effect on institutional PRS investors, especially those based overseas. Existing surcharges for non-residents and the general surcharge applicable to all but individual homebuyers ensure that the SDLT rate does not fall below five percent, even with MDR.
  • Mixed-Use Property Investors: Investors in PRS schemes that include some commercial property will be affected due to previously enjoying reduced SDLT rates under MDR, facilitated by an HMRC concession related to a drafting error.
  • Purpose-Built Student Accommodation Investors: The cost of purchasing these assets is expected to rise, potentially moving from a one percent to a five percent SDLT charge, impacting property valuations.
  • Smaller, SDLT Resident Investors: For those purchasing fewer than six units in a single transaction, the abolition of MDR will significantly increase investment costs, with SDLT rates potentially reaching up to 15 percent.
  • Individuals Buying Homes with Ancillary Dwellings: The tax costs for these purchases will increase, although MDR was not initially aimed at assisting with such transactions.

Impact on Scotland and LBTT

  • No Direct Impact on Scotland: Scotland uses LBTT, not SDLT, so the change doesn’t apply. However, Scotland might adjust its own tax in response.
  • Financial Implications: The change could reduce Scotland’s budget because of how UK and devolved taxes affect funding. If Westminster raises or cuts a tax with a Scottish equivalent, it impacts Scotland’s finances.
  • Possible Responses in Scotland: Scotland might quickly end LBTT MDR to match England, wait until its next budget to decide, or tweak MDR without fully ending it. This could make Scotland slightly more appealing for real estate investors, but any impact is likely to be small.

➤ Multiple Dwellings Relief (MDR) lowered Stamp Duty Land Tax (SDLT) by calculating it on the average price per dwelling in transactions involving multiple homes, subject to a 1% minimum rate, encouraging property development and investment.

Multiple Dwellings Relief (MDR) ceased on June 1, 2024; however, if your property was bought before this date, you have until April 30, 2025, to submit a claim, provided it’s within one year of purchase.

Multiple Dwellings Relief (MDR) allowed for a more favourable SDLT calculation when purchasing more than one dwelling in a single transaction. The relief calculated SDLT based on the average cost per dwelling, subject to a minimum rate of 1%, potentially lowering the overall SDLT due.


MDR was optional and had to be claimed by the purchaser. It was applicable when buying multiple residential units, altering the SDLT rate to consider the mean consideration per dwelling. This relief could significantly impact SDLT calculations, especially in transactions involving several properties. Importantly, MDR could be applied even when purchasing “off-plan” properties or when the development involved multiple residential units.

Examples Where This Relief Could Have Been Be Applied:

  • Example 1: A developer buys a block of 20 flats for £2.5 million. Without MDR, the SDLT would be based on the total amount. With MDR, the calculation is £125,000 per flat (below the 0% SDLT threshold but subject to a minimum 1% rate due to MDR), potentially reducing the SDLT liability significantly.
  • Example 2: An individual purchases four houses for £1,200,000 and two shops for £300,000 in linked transactions. The houses’ SDLT is calculated on the average value (£300,000 per house), then multiplied by four. The shops are treated separately as non-residential property, with SDLT calculated on their portion of the total transaction value.

Key Points:

  • MDR had to be actively claimed and did not apply automatically.
  • The relief adjusted SDLT calculations to the average cost per dwelling, subject to a minimum 1% rate.
  • MDR applied even to “off-plan” purchases, where construction had not yet started.
  • Transactions involving six or more dwellings could be treated as non-residential for SDLT purposes if more beneficial.
  • The relief could still apply even when higher rates for additional properties or non-resident rates were applicable.

Scenario: Residential Portfolio

Let’s break down the Stamp Duty Land Tax (SDLT) calculations for a residential portfolio purchase, both without and with Multiple Dwellings Relief (MDR), for two different portfolio values: £8 million and £1,200,000. The calculations will include the 3% higher rate surcharge for additional properties since these are residential transactions by a property investor.

Portfolio Valued at £8 Million

Without MDR:

  • Total Purchase Price: £8,000,000
  • SDLT is calculated on the total amount with residential rates plus the 3% surcharge.
    • £0 for up to £250,000
    • 5% on the next £675,000 (£33,750)
    • 10% on the next £575,000 (£57,500)
    • 12% on the remaining amount above £1.5 million (£780,000)
    • Plus 3% on the entire amount (£240,000)
    • Total SDLT without MDR = £1,111,250

With MDR:

  • Average Cost Per Dwelling: £8,000,000 / 10 = £800,000
  • SDLT calculated on the average price per dwelling, then multiplied by the number of dwellings, plus the 3% surcharge on each dwelling.
    • £0 for up to £250,000
    • 5% on the next £675,000 (£33,750)
    • 10% on the remaining £125,000 (£12,500)
    • Plus 3% surcharge on £800,000 (£24,000)
    • SDLT per dwelling = £70,250
    • Total SDLT with MDR = £70,250 x 10 = £702,500
  • Cost Reduction with MDR: £1,111,250 – £702,500 = £408,750


Relief from 15% Rate of SDLT – SDLTM09500

(SDLT Classifications, Reliefs and Exemptions>Common SDLT Reliefs)

The relief from the 15% SDLT rate exempts certain entities, like property developers and charities, from the higher tax when purchasing residential properties for purposes like rental, development, or charitable use, encouraging beneficial investments in housing and urban development.

Summary: This relief is designed to exempt certain transactions from the 15% rate of Stamp Duty Land Tax (SDLT) that normally applies to corporate bodies purchasing residential properties over a certain value threshold.

Explanation: The 15% SDLT rate is a higher rate intended for “non-natural persons” (e.g., companies, corporate firms) buying high-value residential properties. However, there are exemptions to prevent this rate from unfairly impacting entities that purchase residential properties for reasons other than avoiding tax. These exemptions apply to properties bought for rental to third parties, property development, and trading, as well as properties used for charitable purposes.

Potential SDLT Reliefs

Corporate bodies might qualify for relief from the 15% rate if the property is used for specific purposes, such as:

Each relief has specific conditions that must be met to apply.

Additional Surcharges

  • A 3% SDLT surcharge applies to residential properties purchased by companies.
  • A 2% surcharge for non-UK residents buying residential properties in England and Northern Ireland from 1 April 2021, cumulative with other rates.

Key Points on SDLT Relief Conditions

  • Property Rental Business: Relief applies if the property is bought exclusively for rental business on a commercial basis aimed at profit.
  • Property Development or Trading: If the purchase is solely for development or redevelopment and resale, the 15% rate doesn’t apply; instead, higher rates for additional dwellings are charged.
  • Making Property Available to the Public: Transactions intended to exploit the property as a source of income in a qualifying trade are exempt from the 15% rate, subject to specific conditions.
  • Financial Institutions: Acquisitions by financial institutions in the course of lending, intended for resale, are charged at higher rates for additional dwellings, not the 15% rate.
  • Employee Occupation: Properties acquired for employee accommodation by trading businesses are eligible for relief from the 15% rate.
  • Farmhouses: The 15% rate does not apply if the farmhouse is part of a qualifying farming trade and occupied by a qualifying farm worker.
  • Qualifying Housing Co-operatives: Transactions by qualifying housing co-operatives are charged at higher rates applicable to dwellings purchased by companies, not the 15% rate.

Examples Where This Relief Can Be Applied:

  • A property development company purchases a residential property for £2 million to renovate and sell. Without the relief, the SDLT would be £300,000 (15% of £2 million). With the relief, assuming the standard residential rate applies, the SDLT could be significantly less, based on the sliding scale rates applicable to residential properties.
  • A charity purchases a residential property for £2.5 million as part of its charitable activities. Without the relief, SDLT would be £375,000. With the relief, the charity could be exempt from SDLT, provided the property’s use meets the necessary conditions.

Why the Relief Has Been Put in Place: The relief aims to ensure that entities engaging in beneficial activities, such as providing rental housing, developing properties, or supporting charitable objectives, are not unduly burdened by the higher SDLT rate. 

It recognises the importance of these activities in supporting housing availability, urban development, and social welfare, and seeks to encourage investment in these areas without the disincentive of a prohibitive tax rate.

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This Article Written By Nick Garner
Founder Stamp Duty Advice Bureau
Author of Stamp Duty Land Tax Guide
For Property Investors.