SDLT - Multiple Dwellings Relief (MDR) and mixed use acquisitions

I don’t like the word ‘abusive’ although appreciate the legislative provisions were very wide and allowed a taxpayer to interpret the relief in several different ways.  This was compounded by some advisers contacting taxpayers after a purchase and suggesting a claim be made on a contingent fee basis i.e. the agent had a vested interest in making a claim, meaning it was aggressively positioned.  I suspect that frustration by HMRC mostly drove a desire to remove these claims from the system. 

The upshot is, we end up with a complete removal of MDR.  A taxpayer can no longer aggregate the purchase price to workout SDLT when between 2 and 5 dwellings are purchased in the same (or linked) transaction.  This will stop relief claims on homes with annexes or a purchase where one property is more valuable than others in the same transaction.  The biggest loser will be property developers who acquire housing stock for renovation or conversion because removing the relief will add a cost to their project.  

The eagle eyed of you may ask what happens when 6 or more properties are purchased?  Whilst no MDR claim can be made it remains possible to elect for SDLT non-residential status, so lower rates apply to mitigate a liability. 

A review was also conducted on mixed use purchases, but the report concluded no changes should be made – for the moment.  This relief can be claimed when a mixed use asset is acquired to remove exposure to residential rates of SDLT.  A mixed use asset is one that has residential, and non-residential usage, and in my opinion can be a very valuable relief.