Stamp Duty Land Tax (SDLT) is one of the largest up-front costs property buyers face in the UK. Whether you’re purchasing your first rental, expanding your portfolio, or buying through a limited company, any change to SDLT Rule Changes can have a significant impact on your strategy — and your bottom line.
Recently, there have been updates and clarifications to the SDLT framework that every investor should understand. Here’s a clear breakdown of the changes, what they mean for you, and how to make the most of them.
Understanding the SDLT Rule Changes
The UK government has made several adjustments to how SDLT is applied, especially for investors, second-home buyers, and companies.
Here are the key areas that have been affected:
1. Multiple Dwellings Relief (MDR) Reform (Effective June 2024)
The government announced that MDR will be abolished for transactions completing on or after 1 June 2024, unless contracts were exchanged before 6 March 2024.
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What was MDR?
MDR allowed buyers of two or more dwellings in one transaction to calculate SDLT based on the average price per dwelling, rather than the total purchase price. This usually led to a significant tax reduction. -
Impact of the change:
Investors purchasing blocks of flats, HMOs, or mixed-use buildings will now face higher SDLT bills, as they can no longer apply MDR.
SDLT rule changes
2. SDLT Rule Changes Surcharge for Non-Residents
The 2% non-resident SDLT surcharge introduced in April 2021 is still in force. If you’ve spent less than 183 days in the UK in the 12 months before your purchase, you may be liable for the extra charge.
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Tip: UK-resident companies with overseas directors could be caught by this if they’re not careful about meeting the residency test.
3. Commercial vs Residential Classification
Recent HMRC guidance has clarified that certain properties formerly considered “mixed-use” (e.g. flats above shops) may now be fully residential for SDLT purposes — meaning a higher rate could apply.
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Always double-check how the property is classified before purchase — especially for semi-commercial deals.
The Good News
Not all is doom and gloom. Some parts of the SDLT framework remain investor-friendly:
1. First-Time Buyer Relief Still Applies
For those entering the market personally (not through a company), the first-time buyer relief remains in place, exempting properties under £425,000 and reducing SDLT up to £625,000.
2. No SDLT on Shares
If you purchase a property-owning company (rather than the property itself), you pay Stamp Duty on shares (0.5%), not SDLT. This structure still offers strategic opportunities for large portfolios — though it’s complex and comes with legal implications.
3. Structuring via Partnerships
Limited Liability Partnerships (LLPs) and other strategic ownership vehicles may still help reduce SDLT in certain cases — provided you follow the rules. HMRC is watching closely, so expert advice is critical.
The Bottom Line
The SDLT rule changes — especially the abolition of Multiple Dwellings Relief — will raise acquisition costs for many UK property investors. This makes upfront tax planning more important than ever.
Frequently Asked Questions (FAQs) About SDLT Rule Changes
1. What is Stamp Duty Land Tax (SDLT)?
SDLT is a tax you pay when buying property or land in England and Northern Ireland. The amount depends on the purchase price, property type, and your status as a buyer (e.g., first-time buyer, company, or overseas investor).
2. When is Multiple Dwellings Relief (MDR) being abolished?
MDR will be abolished from 1 June 2024. If your transaction completes after this date, you will not be able to claim MDR unless you exchanged contracts before 6 March 2024.
3. those the SDLT Rule Changes affect buy-to-let investors only?
While buy-to-let landlords are heavily impacted, the change applies to any buyer of multiple dwellings in a single transaction — including companies and developers.
4. Can I still save on SDLT if I buy through a limited company?
Yes, but not necessarily through MDR. Company purchases are subject to standard and additional rates, and no first-time buyer relief applies. However, SDLT is a deductible cost, and corporate structuring may open other opportunities.
5. Are mixed-use properties still taxed at lower commercial rates?
Not always. HMRC is cracking down on what qualifies as “mixed-use.” To claim the commercial rate, the property must genuinely combine residential and non-residential use (e.g., a shop with a separate flat). Always check how HMRC views the property.
6. How can I tell if a letter or email about SDLT is a scam?
Look out for:
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Vague terms like “legal publication fee” or “registry fee”
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Requests to pay through QR codes or non-GOV.UK websites
7. What is the non-resident SDLT surcharge and who does it affect?
If you are not UK tax-resident (i.e., you spent fewer than 183 days in the UK in the 12 months before the purchase), you may be charged a 2% SDLT surcharge on top of standard rates.
8. Is buying shares in a property-owning company still a legal SDLT workaround?
Yes, this is still legal and taxed at 0.5% stamp duty on shares instead of SDLT — but the transaction must be carefully structured and reviewed for tax avoidance risks. Always involve a tax advisor and solicitor.
9. Can I appeal an SDLT Rule Changes decision or overpayment?
Yes. If you believe you’ve overpaid SDLT, you can submit a claim for a refund within 12 months of the filing date or within 4 years of the effective transaction date in certain cases. A property tax specialist can help review and process claims.
10. How can I get professional advice for my next property deal?
We offer specialist SDLT reviews, tax planning for buy-to-let and HMO investors, and tailored advice for UK and overseas property buyers.
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