How is SDLT calculated on the purchase of six or more dwellings by a company?

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“We are acting on a bulk purchase of 14 apartments in London. The apartments are new builds but are ready for legal completion now so we could exchange and complete at any time.

Our client the purchaser is looking to rent them out after completion. He has bought previous rental investments in London.  The sellers have provided us with a single contract for all 14 apartments and the total purchase price is £9,501,750. On average each apartment is £678,964. The buyer will take a mortgage to finance the purchase. The buyer will use an offshore company to purchase the property (unless there is any advantage in purchasing in his sole name).

My question is, taking into account all the SDLT changes, higher 3% SDLT for additional property, what would be the best structure to use in order to minimize his SDLT liability.

(1) Is using his company (SPV) the best structure v personal. He is buying purely for rental business, rentals to unconnected third parties on commercial terms.

(2) Can he use multiple dwelling relief (MDR)

(3) Can he treat this as non-commercial transaction as its more than six apartments in a single transaction.

(4) We have requested the sellers to issue individual contracts for each of the 14 units, this is to safeguard our client in case of a default to complete the purchase. If we use individual contracts for each of the units I assume we can still use MDR or treat the transaction as a commercial deal (as there will be six or more apartment even though they are separate contracts)

(5) In these circumstance would it be more beneficial(less tax) for the buyer to apply for MDR and treat this transaction as a residential purchase or apply the commercial rates of SDLT.”

Source: BLG Member



(1)  This is too wide a question for me to answer here and, in any event, I do not have enough information.

Using an SPV would obviously be detrimental from an SDLT point-of-view if the acquisition of any of the flats would be taxed at the 15% rate for the acquisition of ‘higher threshold interests’ by a company (when MDR* and section 116(7) FA 2003 which treats the purchase of six or more dwellings in a single transaction as non-residential are both disapplied).  There is an exemption where the acquisition is exclusively for use as a source of rents or other receipts in the course of a property-rental business which I have assumed will be the case here.

(2)  Yes and if MDR is claimed the provisions of section 116(7) are expressly disapplied.

(3)  Yes (in effect, as an alternative to MDR).

(4)  Yes provided, in the case of section 116(7) FA 2003, that they remain a single transaction.

(5)  MDR would use the rates in Table A (including the 3% surcharge) and apply them to the average price per flat of £678,094 and then multiply the result by the number of flats:

£44,247 x 14 = £619,458

If the transaction is treated as non-residential Table B will apply and the SDLT will be £464,587.

At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.

* – Please note that multiple dwellings relief (‘MDR’) is abolished from 1 June 2024 unless contracts were exchanged on or before 6 March 2024 or are substantially performed before 1 June 2024.

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