How much SDLT is payable on the purchase of nine flats?
3% Additional Rate, Linked Transactions, Multiple Dwellings Relief
“Clients purchasing in their own names. Buying three freehold buildings for the total price of £680,000. Linked transactions as all three buildings owned by the same seller although we have three separate contracts. The buildings are divided into nine flats between them and are let on Assured Shortholds and I would therefore assume duty would be based on an average price of just over £75,500 resulting in total duty of £20,403 which saves the clients over 50% of ‘Buy to Let’ duty based on the full price. Am I right?”
Source: BLG Member

You are correct, provided that multiple dwellings relief (MDR) is claimed on the SDLT1 a saving will be made but my figure is slightly different. The 3% surcharge will apply.
MDR works as follows:
1. Divide the consideration given for the transaction (and any linked transactions) attributable to dwellings by the total number of dwellings to give the average price per dwelling:
(£680,000 ÷ 9 = £75,556)
2. Calculate the amount of tax due on the average price using the tax rates and bands for residential property (here including the 3% surcharge):
(£2,266)
3. Multiply the amount of tax due on the average price by the number of dwellings to produce the total amount of tax attributable to dwellings:
(£2,266 x 9 = £20,394)
4. As there are linked transactions, apportion the amount of tax between the linked transactions pro rata.
5. Compare the total amount of tax attributable to dwellings arrived at as above with an amount equal to 1 per cent of the consideration attributable to dwellings and if it is less increase it to that minimum amount.
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.
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