Abolishment of Multiple Dwelling Relief: What Changed on 1 June 2024 and Who Is Affected

If you are buying two or more dwellings in one transaction, the relief that used to soften the SDLT bill has gone. Multiple Dwellings Relief was scrapped for SDLT in England and Northern Ireland on 1 June 2024. Finance (No. 2) Act 2024 section 7 repealed both section 58D and Schedule 6B of FA 2003 in full, with effect for land transactions with an effective date on or after that date. On a typical four-dwelling deal the loss of MDR can add tens of thousands of pounds to your stamp duty, so the first questions are what changed, when it changed, whether you are still inside the transitional protection, and what you can use instead.

The section 7(5) anti-forestalling rules, the three surviving statutory routes worked through in mechanics terms, and a full portfolio cost comparison sit on our F(No.2)A 2024 s.7 transitional rules page. If you are buying in Wales, the relief survives separately under LTTA 2017 Schedule 13, covered on our Welsh LTT MDR page. The six-or-more-dwellings deeming that does most of the post-abolition heavy lifting has its own s.116(7) page.

What changed, in one paragraph

From 1 June 2024 onwards, if you acquire multiple dwellings in a single transaction (or in linked transactions) you cannot compute SDLT on the average consideration per dwelling using the old Schedule 6B mechanic. You pay SDLT on the full consideration at the standard residential rates instead, plus the 5% additional-dwellings surcharge under FA 2003 Schedule 4ZA where it applies. On most small portfolios (two, three, four, or five dwellings) that is a material increase, often more than doubling the figure MDR would have produced. The exceptions are where you can reach the six-or-more-dwellings statutory deeming under FA 2003 section 116(7), where you can use the partnership sum-of-lower-proportions architecture under FA 2003 Schedule 15, or where you fit a genuine sub-sale arrangement under FA 2003 section 45. Each has its own eligibility tests, and none is a like-for-like replacement for MDR.

Who is still inside the transitional protection

The Government did not abolish MDR with retroactive effect, and it built two layers of transitional protection into the abolition statute. Section 7(4) of Finance (No. 2) Act 2024 protects two cohorts.

The first is contracts entered into on or before 6 March 2024 (Spring Budget 2024 day). Section 7(4)(b) preserves MDR for these contracts where they run through to completion in the normal course. The protection is conditional: section 7(5) defeats it where the contract has been materially varied after 6 March 2024, where the rights under it have been assigned or transferred after that date, where an option or pre-emption right has been exercised after that date, or where the transaction is effected in pursuance of a sub-sale or further transaction created after that date. The wording is deliberately broad to stop you sitting on an option under a pre-Budget contract, repricing the deal, or assigning the contract to a new buyer to retrofit MDR onto a transaction that should sit on the post-abolition side.

The second is contracts entered into between 7 March and 31 May 2024 inclusive, where substantial performance under FA 2003 section 44 also occurred before 1 June 2024. Section 7(4)(a) preserves MDR for these. Substantial performance is reached when you (or a connected person) take possession of substantially the whole of the property, when a substantial amount of the consideration (in practice usually 90% or more) is paid, or when the first payment of rent under a lease is made. If you exchanged in April 2024, took possession in mid-May 2024, and completed formally in October 2024, you are inside section 7(4)(a) protection. If you exchanged in April 2024 with completion in October 2024 and had no early possession, no early substantial payment, and no licence to occupy ahead of completion, you are outside it.

The effective-date test does the heavy lifting

The transitional analysis turns on the FA 2003 section 119 definition of 'effective date'. Section 119 sets the effective date as the earlier of (a) the date of completion of the land transaction, and (b) the date on which the transaction is substantially performed. A contract dated 14 February 2024 with formal completion on 10 July 2024 has an effective date of either 10 July 2024 (if no substantial performance trigger fell earlier) or the earlier substantial-performance date. If the effective date is on or after 1 June 2024, section 7(3) puts the transaction on the post-abolition side; section 7(4)(a) cannot rescue it because the substantial performance also fell after 1 June 2024. If the effective date is before 1 June 2024 because substantial performance triggered earlier (early possession, early bulk payment, early lease rent), the transaction is on the pre-abolition side and MDR may be available subject to all the other Schedule 6B conditions.

If you are in the transitional period, the documentary timeline matters: key handover correspondence, contractor authorisations, bank payment records, licence-to-occupy agreements, and any record of early occupation. HMRC enquiries on transitional MDR claims after 1 June 2024 will test the substantial-performance question, and the evidence has to be there.

The anti-forestalling rule in plain English

The Government anticipated that holders of pre-Budget contracts would try to keep MDR alive by varying, assigning, optioning, or sub-selling the transaction past the abolition. Section 7(5) of Finance (No. 2) Act 2024 catches the four most obvious patterns. A material variation of a pre-6-March-2024 contract after 6 March 2024 defeats the section 7(4)(b) protection. An assignment of the rights under the contract after 6 March 2024 defeats it. The post-6-March-2024 exercise of an option, right of pre-emption, or similar right granted under the contract defeats it. A transaction effected in pursuance of a sub-sale, novation, or further transaction created after 6 March 2024 defeats it. Each of these tests is fact-sensitive and the wording in your contract matters. Minor administrative variations that do not affect the consideration or the property identity may not amount to a 'material variation', but treat any post-Budget change to a pre-Budget contract as at risk.

What replaces MDR if you are buying today

Three statutory routes survived the abolition. Each operates on its own logic.

Route one: the six-or-more-dwellings statutory deeming

FA 2003 section 116(7) reads: 'Where six or more separate dwellings are the subject of a single transaction involving the transfer of a major interest in, or the grant of a lease over, them, then, for the purposes of this Part as it applies in relation to that transaction, those dwellings are treated as not being residential property.' This is statutory deeming, not a relief that requires a claim. The transaction is computed at non-residential SDLT rates under FA 2003 section 55 Table B (top rate 5% above £250,000) with no additional-dwellings surcharge under Schedule 4ZA (the surcharge applies only to residential transactions and section 116(7) takes the dwellings outside the residential category). For a genuine 6-plus-dwelling acquisition this is the workhorse route post-abolition and typically the most SDLT-efficient outcome available.

Route two: the partnership sum-of-lower-proportions

FA 2003 Schedule 15 paragraph 10 sets out the sum-of-lower-proportions (SLP) calculation that applies where a partnership acquires a chargeable interest from a connected person. The SLP mechanic reduces the SDLT base by reference to the incoming partner's existing interest in the underlying assets, and in many genuine partnership transactions the result is a markedly lower SDLT charge than the headline residential rate computation would produce. The route is conditional. The partnership must be a genuine pre-existing letting business or property business with operational substance, not a vehicle you set up shortly before the transaction to access the SLP route. The connected-person test under FA 2003 Schedule 15 paragraph 39 (incorporating CTA 2010 section 1122 and the partnership-specific extensions) governs which transferors qualify.

Route three: section 45 sub-sale relief

FA 2003 section 45 provides relief from SDLT where, in substance, a pre-completion onward sale takes place such that the original contract is satisfied by a transfer to a third party rather than to you as the first buyer. The relief operates by disregarding the original contract for SDLT purposes and recognising only the onward transaction. The provisions were tightened by Finance Act 2013 to defeat tax-driven sub-sale schemes, and the rules now require the sub-sale to reflect commercial reality. For genuine pre-completion onward-sale arrangements (typically in development contexts) section 45 remains available; for sub-sales constructed after the fact to manufacture SDLT relief, it does not.

The non-route: mixed-use classification

Claims firms keep promoting mixed-use SDLT classification as a workaround for the loss of MDR. If your portfolio is ordinary residential dwellings, this argument almost always fails. The leading case is Hyman v HMRC [2022] EWCA Civ 185, in which the Court of Appeal upheld HMRC's residential classification of a property with a sizeable garden and confirmed that the threshold for 'mixed use' under FA 2003 section 116 is materially higher than most people assume. A portfolio of buy-to-let houses or flats is residential property. The section 116(7) six-plus-dwellings route is the only statutory mechanism that takes it out of the residential rate architecture, and below the six-dwelling threshold the residential rates apply.

Cross-border: the Welsh and Scottish position

The abolition is SDLT-specific. Wales operates Land Transaction Tax under LTTA 2017, and the Welsh Multiple Dwellings Relief survives at Schedule 13. If you are buying property in Wales on or after 1 June 2024, compute LTT under the Welsh framework and use our Welsh LTT MDR page for the mechanics. Scotland operates Land and Buildings Transaction Tax under LBTT(S)A 2013 and the Scottish MDR survives at Schedule 5; the Scottish Parliament has not legislated an MDR repeal at the time of writing, so the Scottish relief remains live. If you are buying across two or more of the SDLT, LTT, and LBTT jurisdictions, you need a separate analysis for each, because no single relief operates across all three regimes.

A worked numerical comparison: four dwellings at £1.2 million

Numbers make the cost step-up concrete. Say you already own one property and are buying a four-flat portfolio for £1.2 million from a single vendor in a single transaction. Average per dwelling is £300,000.

Pre-abolition position (effective date before 1 June 2024 or inside a section 7(4) carve-out). MDR computes SDLT on the average consideration per dwelling multiplied by the number of dwellings. £300,000 at standard residential rates plus the 5% additional-dwellings surcharge gives roughly £17,500 per notional dwelling. Multiplied by four dwellings, the total MDR-mechanic SDLT is approximately £70,000. The minimum 1% rate floor in Schedule 6B does not bite here because the computed rate exceeds 1%. (The exact figure depends on the band-by-band split and the SDLT calculator output; the order of magnitude is firm.)

Post-abolition position (effective date on or after 1 June 2024 with no transitional protection). You pay SDLT on the full £1.2 million at standard residential rates plus the 5% additional-dwellings surcharge across the whole price. The residential bands (zero up to £125,000, 2% on £125,001 to £250,000, 5% on £250,001 to £925,000, 10% on £925,001 to £1.5 million) layered with the 5% surcharge produce a total SDLT charge of approximately £115,000 to £125,000. The exact figure again depends on band interaction; the gov.uk SDLT calculator gives the precise number for any specific deal.

The cost step-up on this four-dwelling deal is therefore in the region of £45,000 to £55,000 of additional SDLT, a 60% to 75% increase on the pre-abolition number. For a five-dwelling deal the gap is wider; for a three-dwelling deal it is narrower in absolute terms but proportionately similar. For a six-or-more-dwelling deal the section 116(7) deeming changes the picture entirely (non-residential rates with no surcharge, typically substantially below both the pre-abolition MDR number and the post-abolition residential-plus-surcharge number).

The four-year enquiry window on pre-abolition claims

If you claimed MDR before the abolition, your claim may still be inside HMRC's enquiry window. The relevant timing is FA 2003 Schedule 10 paragraph 12: HMRC may open an enquiry into an SDLT return at any time within nine months of the filing date, or within four years of the filing date where your behaviour was careless or where the enquiry concerns a chargeable consideration adjustment. Claims filed in 2022 to 2024 may still be inside the four-year careless-behaviour window where HMRC views the claim as outside the policy intent. The original Schedule 6B conditions (the dwelling definition under paragraph 7, the average-consideration calculation, the linked-transactions aggregation, the minimum-dwellings test) all remain testable on enquiry even though the relief is now repealed. If you claimed MDR on a granny-annex argument or a marginal-subdivision argument in 2022 or 2023, the subsequent abolition does not protect you from enquiry; HMRC tests the position at the original effective date.

Where an enquiry concludes that the original claim was incorrect, the underpaid SDLT becomes payable with interest under FA 2009 section 101 from the original due date. Penalty exposure under FA 2007 Schedule 24 follows the same behaviour-rating ladder as for post-abolition mistakes (reasonable care, careless, deliberate, deliberate-and-concealed) with the unprompted-disclosure reductions available where appropriate.

What this means if you are buying today

If you are running a portfolio acquisition through diligence in 2026, the practical position is this. If the deal includes six or more dwellings in a single transaction (or in linked transactions that aggregate under FA 2003 section 108), the FA 2003 section 116(7) deeming applies automatically and the non-residential SDLT rates are your starting point. If you buy through a genuine partnership from a connected person, the Schedule 15 sum-of-lower-proportions calculation may produce a markedly lower charge than the headline rates, though it needs specialist computation. If the deal involves a genuine pre-completion sub-sale, section 45 can disregard the original contract, but this is narrow and rarely relevant outside a development context. Outside these three routes, the realistic position is residential SDLT rates on the full consideration plus the 5% additional-dwellings surcharge where it applies, and your SDLT charge will be materially higher than the MDR-era number would have been.

Where to read more

For the anti-forestalling mechanics, the surviving routes in operational detail, and a fuller cost comparison, read our F(No.2)A 2024 s.7 transitional rules page. If you want the policy backstory (the consultation findings, the claims-firm market response, and the broader Treasury position on SDLT reliefs), our page on why the MDR abolition raises concerns sets it out. If you are checking a pre-abolition claim that may still be inside the four-year enquiry window, our guide to MDR eligibility and benefits covers the conditions that applied. The Welsh and Scottish positions, the section 116(7) six-plus-dwellings deeming, and the wider buy-to-let SDLT rates each have their own page if you need the full picture.