Landlords will forfeit £385 million in tax breaks as the Treasury abolishes multiple dwellings relief. The policy change, revealed by Chancellor Jeremy Hunt in the March Spring Budget, eliminates the relief for those purchasing multiple properties, effective June 1.
In his budget statement, Hunt asserted that this aspect of the stamp duty tax regime had been “regularly abused,” adding that there was “no evidence of promoting investment in the private rented sector.”
However, the Treasury has outlined transitional rules allowing multiple dwellings relief to be claimed for contracts exchanged on or before March 6, 2024, regardless of the completion date.
Introduced in 2011, multiple dwellings relief provided a reduction in stamp duty for individuals and businesses buying two or more properties in a single transaction. Ann-Marie Daly, a real estate solicitor at Primas Law, explains that the relief calculated stamp duty based on the average value of the acquired properties rather than assessing each individually.
“This change will impact property owners and investors engaged in bulk property transactions, as each dwelling will now be subject to individual assessment,” Daly notes. She adds that for transactions where contracts were exchanged on or before March 6, 2024, multiple dwellings relief may still apply, provided there is no alteration to the contract after that date, even if completion occurs after June 1, 2024.
Daly further clarifies that if contracts are exchanged after March 6, 2024, and substantially completed before June 1, 2024, multiple dwellings relief might still be available.
Despite the abolition of multiple dwellings relief, the existing rule for transactions involving the purchase of six or more residential properties remains unchanged. Such transactions are not treated as residential properties; instead, non-residential property stamp duty rates will apply, though this relief will still represent a loss in value compared to multiple dwellings relief.
As the property market adjusts to these new rules, stakeholders are bracing for significant financial impacts and reassessing their investment strategies.