Multiple Dwellings Relief (MDR): Could You Have Paid Too Much SDLT?

If you've purchased a property with more than one dwelling, such as a house with an annex, a block of flats, or multiple units on one title - you may have paid more Stamp Duty Land Tax (SDLT) than necessary.

This is where Multiple Dwellings Relief (MDR) comes in. MDR is one of the most underclaimed SDLT reliefs, yet it can save property buyers thousands of pounds if applied correctly.

In this guide, we explain what MDR is, who qualifies, and how to check if you’ve overpaid.

What Is Multiple Dwellings Relief (MDR)?

Multiple Dwellings Relief is a tax relief available when you purchase two or more residential dwellings in a single transaction, or as part of a linked transaction.

Rather than calculating SDLT based on the total purchase price, MDR allows tax to be calculated on the average price per dwelling (with a minimum rate of 1%), which often results in significant savings.

What Qualifies as a “Dwelling”?

A dwelling is defined as a unit that is suitable for use as a separate residence. To qualify for MDR, each unit must have:

Its own entrance
Essential living facilities (e.g. kitchen, bathroom)
Independent access or separation from other dwellings

Examples of qualifying properties:

A house with a self-contained annex
A block of flats purchased under one freehold
Multiple cottages or homes on the same land title
Student or holiday lets (in some cases)

How MDR Reduces SDLT

Instead of paying SDLT based on the total purchase price, MDR divides the price by the number of dwellings, calculates the SDLT per unit, and then totals it up.

Example:

You buy a block of 4 flats for £800,000.
Without MDR: SDLT could be over £30,000.
With MDR: Tax is calculated as if you bought 4 homes at £200,000 each.
SDLT drops to around £10,000 - a saving of £20,000+.

Note: The minimum SDLT rate under MDR is 1% of the total price.

Common Reasons MDR Is Missed

Solicitors unaware of the relief or cautious about applying it
Properties not clearly marketed as “multiple dwellings”
Confusion over annexes or converted buildings
Misclassification as a single property on SDLT returns

Can You Claim MDR After Completion?

Yes. If you bought in the last four years and MDR was not applied, you may be able to reclaim overpaid SDLT from HMRC.

At SCA Tax, we’ve helped clients recover thousands through retrospective MDR claims - especially on:

Large family homes with annexes
Buy-to-let portfolios
Converted properties

Who Can Claim MDR?

You may be eligible if you:

Purchased two or more dwellings in a single or linked transaction
Can demonstrate that each unit functions as an independent residence
Bought within the last 4 years (for a refund)
Are about to buy and want to check eligibility before completion

Get Pre-Purchase MDR Advice

Thinking of buying a property with more than one unit? At SCA Tax, we also offer pre-transaction reviews to check if MDR applies before you commit.

This can help you: