Starting June 1, 2024, HM Revenue and Customs is abolishing the Multiple Dwellings Relief (MDR) in Stamp Duty Land Tax (SDLT).
MDR was a discount given to those buying multiple properties. It allowed buyers to pay tax based on the average property value instead of the total value. MDR aimed to encourage investment in residential property and to boost the supply of rental housing. However, evaluations showed it did not do much to support these goals and was not cost-effective. Thus, HMRS is repealing the legislation for MDR (Schedule 6B to the Finance Act 2003).
From June 1, no property transactions will qualify for MDR. However, contracts already in place before March 6, 2024, will still be eligible for MDR if there have not been any changes made to the contract after that date. Transactions that have already substantially begun before June 1, 2024 will also qualify for MDR.
Impacts:
Experts expect the projected change in government finances to increase tax revenue in the coming years, but they do not anticipate it will significantly impact the economy.
Individuals buying multiple properties may face higher costs, but property ownership distribution is expected to stay the same. Landlords and businesses will lose the MDR discount for multiple properties but can still qualify for other tax rates if buying six or more properties or mixed properties.
While businesses may face one-time costs to adapt to the new rules, experts do not expect these changes to have any major effects on them.
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