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Multiple dwellings relief to be abolished from tomorrow
The abolishment of multiple dwellings relief is due to come into force tomorrow, removing up to £385m of tax breaks for landlords in the next five years.
Chancellor Jeremy Hunt (pictured) confirmed that multiple dwellings relief would be abolished in the Spring Statement earlier this year.
It is a bulk purchase relief in stamp duty regime, introduced in 2011, that allows a buyer of two or more residential properties in a single or linked transaction to pay stamp duty on the average price of each property.
In the Spring Statement, the government said that multiple dwellings relief had seen “incorrect and abusive claims”, adding that there was “no strong evidence the relief is meeting its original objectives of supporting investment in the private rented sector”.
The statement added that property transactions whose contracts exchanged on or before 6 March would benefit from the relief regardless of when they complete, as will purchases completed before 1 June.
The report added that abolishing the scheme would save £385m by 2028-29. Over the next five years, the savings will rise as follows: £70m in 2024-25, £220m in 2025-26, £300m in 2026-27 and £340m in 2027-28.
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‘A progressive move’
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, said: “Multiple dwellings relief has been proven not to work, with HMRC saying there’s no evidence it has incentivised residential property investment or significantly improved rental housing supply.
“It has, however, given tax breaks on high-valued properties to those who can afford to pay a bit extra. Therefore, it’s a progressive move to abolish this tax that only affects a few people.”
Ann-Marie Daly, real estate solicitor at Primas Law, said that the scheme aimed to “lower barriers to investment in residential property and promote private rented sector housing supply”.
Daly said that the change will “impact property owners and investors engaged in bulk property transactions, as each dwelling will now be subject to individual assessment”.
“While multiple dwellings relief has been abolished in the Spring Budget, there is no change to the existing rule for transactions involving the purchase of six or more residential properties. Transactions of this nature are not treated as residential properties and, instead, the non-residential property stamp duty rates will apply. However, this relief will still represent a loss of value in comparison to multiple dwellings relief,” she noted.