Landlord Guide To Multiple Dwellings Relief and 2024 Tax Changes

‍Important: Multiple dwellings relief (MDR) has been abolished and can no longer be claimed for transactions which complete, or substantially perform, on or after 1 June 2024. Additionally, in the Autumn Budget 2024, the government increased buy to let stamp duty surcharge from 3% to 5% as of 31st October 2024.

In a changing tax climate, landlords who understand property tax regulations have a better shot at minimising costs and maximising returns. There have been a range of tax changes in 2024, making staying informed even more important, especially with the significant adjustments to SDLT Multiple Dwellings Relief (MDR). 

These changes represent a fairly comprehensive overhaul of the existing landlord tax system and present an inevitable adjustment phase for landlords as we go into 2025 and beyond. 

Thankfully, there are a range of helpful tools available to landlords who want to stay ahead of the curve. 

How Did Multiple Dwellings Relief Work? 

Multiple Dwellings Relief provided tax relief for property investors who bought multiple residential properties in a single transaction or series of linked transactions. MDR effectively reduced Stamp Duty Land Tax (SDLT), which landlords paid on these acquisitions. The relief meant landlords could calculate SDLT instead of the whole purchase price - often saving them huge amounts of money.

For example, if a landlord bought three residential properties at £600,000, SDLT multiple dwellings relief would have applied to the SDLT calculation on the basis of an average property value of £200,000 instead of the full £600,000. That typically meant lower SDLT costs - allowing landlords to make more profit. 

Who Qualified for Multiple Dwellings Relief?

At least two residential properties had to be purchased together or in a series of linked transactions to qualify for the multiple dwellings relief. These qualifying properties could be standalone houses or multiple units in one building, such as flats or converted homes.

MDR benefited landlords with a long-term investment strategy by encouraging multiple properties to be purchased. Of note, SDLT multiple dwellings relief was not applicable to commercial properties or certain mixed-use buildings. 

Multiple Dwellings Relief: Abolished On 1st June 2024

In a major change, SDLT Multiple Dwellings Relief was abolished as of the 1st of June 2024. This change has already led many landlords to rethink their investment strategies, as MDR was one of the most effective ways to reduce Stamp Duty Land Tax (SDLT) obligations. 

As the tax environment becomes less favourable for large-scale property purchases, landlords now need to explore new tax planning strategies and adjust their purchasing patterns to remain profitable.

Landlord Studio can support landlords in adapting to these shifts by providing real-time financial insights and tracking property expenses to stay aligned with new tax regulations.

Other Significant Property Tax Changes 2024

The abolishment of multiple dwellings relief isn’t the only major tax change to impact property investors in 2024. The 2024 Autumn Budget introduced several sweeping tax changes including a change to the SDLT surcharge for second homes, and capital gains tax adjustments. 

Capital Gains Tax Adjustments 

Thankfully, the anticipated increase in Capital Gains Tax (CGT) on residential property sales did not occur. 

The government has, however, aligned the main CGT rates with those currently applied to residential property, raising the basic CGT rate from 10% to 18% and the higher rate from 20% to 24%. 

Effective 30 October 2024, the new CGT rates are as follows:

• Basic rate: from 10% to 18%
• Higher rate: from 20% to 24%

Increase Buy-To-Let SDLT Rates 

One of the major changes to impact property investors is the increase in the Stamp Duty surcharge for second homes and investment properties. As part of the Autumn Budget 2024, the additional dwellings surcharge increased from 3% to 5%SDLT effective from the 30th of October.

With this change, landlords will incur SDLT rates of:

• 5% on properties valued up to £250,000,
• 10% on the portion from £250,000 to £925,000,
• 15% between £925,000 and £1.5 million,
• and 17% on any amount above £1.5 million.

‍Use our free buy-to-let SDLT calculator →

Making Tax Digital 

Making Tax Digital (MTD) for Income Tax was phased in from April 2026, following the government's commitment to it at the Autumn Budget. 

Landlords and investors whose own start date has not yet arrived will benefit from preparing now. 

Since April 2026, landlords earning over £50,000 per year have had to change how they track and report their finances, with digital tax records and quarterly updates. MTD extends to landlords with income above £30,000 in 2027, and above £20,000 in 2028.

Landlord Studio makes digital record-keeping easy. Our direct HMRC integration, Xero integration and advanced financial reporting tools mean all Landlord Studio users can meet their MTD requirements. 

For a full breakdown of the UK Autumn Budget 2024 tax changes that impact landlords read the article →

Landlord Studio: Helping Landlords to Adapt to Tax Changes 

Tensions around these tax changes may be high, but landlords can adjust with the right tools. Features in Landlord Studio can be of great help to landlords in managing expenses, complying with laws, and maximising tax reliefs: 

• Income & Expense Tracking: Track every allowable expense with ease with our powerful mobile app, built-in receipt scanner, and bank feeds feature which allows you to import and auto-match transactions, create custom rules, and reconcile with a click. 
• Financial Reporting: Instantly generate customisable financial reports to deep dive into your finances, prepare your tax returns, and assess your liabilities.
• Compliance Management: Set up reminders for important dates and deadlines, store and organise important documents, track leases and tenancies, and stay on top of all your landlord compliance requirements.

Save time, manage compliance, and reduce accounting errors for streamlined, accurate digital record keeping. Create your free Landlord Studio account today.

Adapting To Changing Landlord Taxes: MDR Abolished

With Multiple Dwellings Relief abolished, increased SDLT rates, the removal of key tax reliefs such as the Section 24 provision introduced in 2020, and Making Tax Digital for landlords now in force, it is becoming harder for investors to achieve their long-term financial goals through property investing. 

Related: A Guide To Landlord Tax: Rates, Relief, and Changes

Despite these changes, property remains an attractive investment opportunity should investors be able to find the ‘right’ opportunities for long-term capital gains. Landlords, however, now more than ever, need the right tools for the job. Keeping accurate and detailed financial records is not only vital for tax compliance, but, with fewer reliefs and higher taxes, they are essential if landlords want to operate a sustainable cash-flowing business.

For landlords looking for a better way to manage their buy-to-let finances, Landlord Studio offers all the tools you need to stay on top of your finances and maximise revenue. Our award-winning income and expense tracking tools like bank feeds and our receipt scanner are paired with property management and compliance tools designed to help landlords stay compliant, reduce accounting errors, and increase profitability.

Create your free Landlord Studio account today and discover how Landlord Studio can help you run a more profitable and compliant buy-to-let business.

You Might Also Like

• About The Furnished Holiday Let Tax Changes
• 5 Best Property Management Software for UK Landlords
• The Renters' Rights Bill 2024: What Landlords Need to Know
• A Landlords Guide to Tax on Rental Income
• How To Increase Cash Flow For Your Residential Buy-to-Let