Advice on eligibility for Multiple Dwellings Relief on Stamp Duty Land Tax

annarose03

Hello everyone

I always seem to get the best advice here so hoping some of you good people can help me.

We are looking to purchase a property worth £750k. It is advertised as two properties a 3 bed cottage and 11 bed barn. We are hoping to claim Multiple Dwellings Relief.
We will be purchasing the properties as two - they are currently on separate title deeds and the cottage has had a mortgage on it previously. The properties will be separately owned. The cottage will be owned by my brother and my husband. The barn will be owned by my parents and me. The estate agent floor plans show them as separate. They have their own entrances and facilities e.g. kitchens/bathrooms/living rooms etc. They are connected by an internal door that locks and separates them.

The cottage was previously used as owner's accommodation and needed to be private from the barn which was used as a large holiday let. They do not currently have separate council tax and utilities although they do have their own separate addresses. Do you think we are correct in assuming we are eligible for MDR? And if not is there anything we can do before purchase to become eligible?

Many thanks for any help or advice.

allconnected

So the properties will be purchased in two separate transactions with two separate buyers? Multiple dwellings relief is for multiple purchases by the same buyer. Why do you think you will qualify?

SDLT_Geek

Multiple dwellings relief can be available over two transactions so long as they are "linked".  These two purchases might be, for example if negotiated as a single package.  There is information about how the relief works at the blog here https://www.blakemorgan.co.uk/additional-3-stamp-duty-land-tax-surcharge-on-granny-flats-and-other-dwellings/ which has a link to a more detailed paper.

annarose03

allconnected said:

So the properties will be purchased in two separate transactions with two separate buyers? Multiple dwellings relief is for multiple purchases by the same buyer. Why do you think you will qualify?

That would be the ideal way to do it as then we would have no Stamp Duty to pay at all if we complete before March. Unfortunately our solicitor told us that because we are related and buying the properties from the same seller they will be seen as a linked transaction so the amounts stack for Stamp Duty. That's why we are looking at Multiple Dwellings Relief. It's frustrating as essentially we are all just looking to buy a 250k property each and so should be covered by the current Stamp Duty relief. Even with Multiple Dwellings Relief I think we still have to pay 1 percent of the total.

annarose03

SDLT_Geek said:

Multiple dwellings relief can be available over two transactions so long as they are "linked".  These two purchases might be, for example if negotiated as a single package.  There is information about how the relief works at the blog here https://www.blakemorgan.co.uk/additional-3-stamp-duty-land-tax-surcharge-on-granny-flats-and-other-dwellings/ which has a link to a more detailed paper.

Thank you. I'd found that blog but hadn't seen the link to the more detailed paper which is very helpful. From everything I have read including the more detailed paper it does seem like we have a good case. But I'm not objective. The main concern I have is whether the lockable door between the properties is enough. Also, the fact that there isn't currently separate council tax. Most of the utilities are accessed separately e.g. the properties have their own fuse boxes, boilers etc...