buy-to-let tax stamp duty

UK stamp duty change quietly came into effect at the weekend

A change to UK stamp duty that Chancellor George Osborne announced in the Spring Budget has now come into effect in England and Northern Ireland.

While numerous changes and alterations to UK stamp duty have been called for by those within the property industry as a way of stimulating or rebalancing the market, the one that was announced back in March may not have been what many had in mind.

Since 2011, UK property buyers have been able to claim multiple dwellings relief when buying more than one property in either a single or a linked transaction, making their stamp duty bill sometimes considerably cheaper. However, as of 1st June, this relief has now been scrapped.

An exception is where a purchase exchanged contracts before 6th March but completes later than the 1st June cut-off. But any buyer looking at purchasing more than one property now – which could include investing in multiple units within a block, or buying a home with a ‘granny annexe’ – can no longer make use of this relief.

Will it make a big difference to your stamp duty bill?

The vast majority of buyers – from homeowners to property investors – will not be affected by this stamp duty change, as HMRC has pointed out that it is not a very widely used tax relief claimed by buyers.

Property investors who used the relief to invest in several units at a time with the same developer are the most likely to be affected, as they may have made use of this option to reduce their stamp duty bill, as well as those who are buying a property which includes an additional, separate building that could be used as accommodation.

The reason the stamp duty tax relief had been brought in in the first place was to help support the private rented sector, by encouraging investors to buy multiple rental homes at a reduced cost and boost housing supply in the sector. However, an external evaluation had found “no strong evidence that it had done so”.

It was also noted that the relief was being “regularly abused”, with some people making spurious claims that didn’t truly qualify for multiple dwellings relief. As Matt Spencer, tax partner at Kingsley Napley LLP, pointed out when it was abolished, removing the relief prevents buyers from illegitimately paying less tax by claiming a property had an annexe.

“The ability for those buying the kind of luxury house that legitimately includes more than one “dwelling” to reduce their SDLT is not something many people will disagree with. By abolishing the rule, however, it will impact a relatively small number of legitimate transactions.

“The investor buying multiple flats, for example, will now be at a disadvantage unless they can buy at least six [and claim commercial SDLT rates]. The rules therefore will now disadvantage certain investors.

“The change in rules also, in a roundabout way, closes down the “loophole” that allowed those purchasing commercial property alongside multiple dwellings in a single transaction to pay sometimes very low SDLT rates [sometimes close to 1%].”

Government “should incentivise” investment

While the government has claimed that multiple dwellings relief has not made a significant difference to property investment, its abolishment has also led to a fresh raft of calls for a stamp duty shake-up, with arguments that more should be done to encourage investment to boost housing supply.

David Hannah, group chairman of Cornerstone Tax, has called the tax relief change a “missed opportunity”, and accused the government of instead implementing a “stealth tax” for the construction industry that does little to aid the sector.

“MDR was first implemented as means to incentivise bulk purchases and provided developers with a suitable avenue for delivering low-cost homes,” said David Hannah. “At a time when demand for affordable housing has skyrocketed, the government should look to create fresh incentives for developers, instead of abolishing old ones.

“The decision by the Chancellor to increase the tax that developers are forced to pay from 1-2% to 5% will have a seismic shift across Britain’s construction sector, leading to project abandonment and further increases to asking prices as supply continues to lag behind an overwhelming demand for affordable housing.

“Don’t be fooled, this is a stealth tax increase with a paper-thin justification laced over the top of it.”

He also added that the Chancellor has missed an opportunity to reform the private rented sector, which could have included abolishing the second home stamp duty surcharge for property investors in the rental sector, or reinstating full mortgage interest tax relief, which was removed under Section 24 in April 2020.

Hannah pointed out that this would have reduced the cost of purchase, incentivising investment, and could also have helped towards reducing sky-rocketing rents in the sector, which have arguably been pushed up as landlords are forced to pass on their additional costs to tenants.

Read more UK property news here. 

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT