How Property Investors Can Reduce SDLT Liabilities

Property Investors: How to Minimise SDLT Costs

Stamp Duty Land Tax (SDLT) is an unavoidable cost for most property investors in England and Northern Ireland. And with surcharges for second homes and buy-to-let purchases, it can quickly become a large upfront expense.

But while you can’t avoid SDLT altogether, there are several legal strategies to minimise your liability and ensure you’re not paying more than you should.

At SCA Tax, we work with investors across the UK to review transactions, apply the correct reliefs, and recover overpaid SDLT where applicable.

Here’s what every property investor needs to know about managing stamp duty efficiently.

Why SDLT Hits Investors Harder

If you already own a property and are purchasing another, you’ll usually be liable for:

Standard SDLT rates
A 3% surcharge on top

For portfolio landlords, this quickly adds up - especially on high-value or multiple-unit purchases.

However, the SDLT system contains specific reliefs and exemptions that, if applied correctly, can lead to significant savings.

1. Understand When Mixed-Use Rates Apply

Properties that include both residential and non-residential elements, such as:

Flats above shops
Pubs with accommodation
Properties with commercial land or agricultural use

may qualify for mixed-use classification. This means:

You pay non-residential SDLT rates
The 3% additional dwelling surcharge does not apply

Key benefit: Mixed-use SDLT is capped at 5%, compared to 12%+ on residential over £1.5m.

2. Use Multiple Dwellings Relief (MDR)

If you’re buying two or more dwellings in one transaction, such as:

A house with a self-contained annex
Blocks of flats
Portfolios of buy-to-lets

you may be eligible for Multiple Dwellings Relief (MDR). This allows HMRC to calculate SDLT based on the average price per dwelling, rather than the total transaction value.

This can dramatically reduce your tax bill, especially when multiple lower-value units are involved.

Important: MDR should ideally be claimed at the time of the SDLT return, but many conveyancers miss it. If missed, you may still be eligible to claim a refund within 12 months of completion, subject to HMRC rules.

3. Review ‘Uninhabitable’ Property Opportunities

If a property is genuinely uninhabitable at the time of purchase, it may not count as a “residential” dwelling in the eyes of HMRC. As a result:

Non-residential SDLT rates apply
The 3% surcharge is avoided

This can be relevant for:

Properties without functioning kitchens or bathrooms
Fire-damaged or derelict homes
Significant structural issues

HMRC applies strict criteria - consult experts before making a claim.

4. Buy Through a Limited Company (When Appropriate)

Many investors purchase property through a limited company structure to access tax planning benefits, such as:

Corporation tax treatment on rental profits
Flexible ownership and succession
Expense deductions

However, SDLT is still due, and the 3% surcharge applies to all purchases (even the first), unless reliefs apply.

That said, combining company purchases with reliefs like MDR or mixed-use can still create tax-efficient outcomes.

5. Transfers Between Connected Parties

If you’re transferring properties between connected parties (e.g. spouses, business partners, or between individual and company), there may be exemptions or reliefs available depending on how the transfer is structured.

Example: A property transfer between spouses is usually exempt from SDLT, even if there’s a mortgage involved.

Why Investors Often Overpay

Even experienced investors frequently overpay SDLT because:

Their solicitors don’t specialise in tax
Reliefs like MDR or mixed-use are complex and misunderstood
HMRC’s guidance is technical and open to interpretation

That’s where we come in.

How SCA Tax Helps Property Investors

We offer specialist expertise in identifying and applying the correct SDLT reliefs—and where tax has been overpaid, we handle the full refund process on your behalf.

We can:

Review your historic property purchases (within the last 4 years)
Identify missed opportunities for relief or reclassification
Submit a professional refund claim to HMRC
Maximise your chance of recovery

Plan Ahead with Pre-Purchase Advice

At SCA Tax, we don’t just handle refunds, we also help before you buy. Our pre-transaction advice can identify potential SDLT reliefs or exemptions in advance, so you know what to expect and how to structure your deal for maximum efficiency.

Whether it’s a mixed-use, multiple dwelling, or non-residential classification, we’ll review the details before contracts are exchanged, helping you avoid overpaying from the start.

Buying soon? Let’s review it first.

As an investor, SDLT doesn’t have to be an unavoidable financial blow. With the right knowledge and the right team, you can legally reduce your liabilities, improve your ROI, and avoid overpaying.

If you've bought property in the last four years, let us check whether you’re due a refund.