Multiple Dwellings Relief (MDR)
Multiple Dwellings Relief (MDR) was a tax relief allowing buyers purchasing multiple residential units to calculate SDLT based on the average price per unit, though it was recently abolished.
For many years, Multiple Dwellings Relief (MDR) was a highly lucrative tax loophole for property developers and investors. If you purchased a building that contained multiple self-contained dwellings (e.g., a block of 6 flats, or a house with a self-contained annex), you could claim MDR.
Instead of paying Stamp Duty on the total purchase price, MDR allowed you to divide the total price by the number of units, calculate the SDLT on that much lower average figure, and then multiply it back up. This often saved tens of thousands of pounds.
Abolition
However, the government abolished MDR in 2024 following reviews showing it was widely abused and did not achieve its goal of stimulating the private rented sector. Investors buying blocks of flats must now look to commercial rates (if 6 or more units) to find tax efficiency.