- Multiple dwellings relief (MDR)
MDR works as a relief from SDLT where the property to be purchased consists of two or more residential dwellings (i.e. a ‘granny annex’) or the substance of the transaction involves the purchase of multiple residential properties from the same or linked vendors. In such circumstances, the purchase consideration is averaged between the number of dwellings and therefore results in a lower SDLT liability.
- Mixed use property
Where a property is purchased, either as a standalone unit or as multiple properties purchased pursuant to the same transaction, and there are a mixture of residential and commercial elements, it is possible to make an argument that the transaction is ‘mixed’ (between residential and commercial) and therefore the lower commercial rates of SDLT should apply to the overall purchase cost.
- Six or more residential purchases
Where six or more residential properties are acquired as part of the same transaction, a taxpayer may elect to treat the total consideration for all properties concerned to be taxed under the lower commercial rates of SDLT.
- Dilapidated property
Where a residential property is being purchased which is not suitable for habitation, it is possible to argue that the additional 3% surcharge now in effect in relation to purchases of second residential property, or a purchase of a residential property by a company, does not apply.
- Partnership transactions
Transfers into and out of partnerships are subject to special SDLT rules and can result in a significant reduction to the potential SDLT liability. These rules are complex and rely on expert guidance in order to determine availability.
- Chattels exemption
SDLT is only chargeable on the value of the property itself. By assigning the correct tax value (as opposed to tax cost) to the chattels included in the transaction, you are able to reduce your SDLT payable.
- Purchase of main residence
The purchase of a second residential property (usually) attracts with it an automatic 3% levy to SDLT on top of the ‘ordinary’ rates. This can be particularly debilitating where the property purchased is intended to replace you existing main residence but there is a delay between selling the old one and purchasing the new one. Luckily, where the old residence is sold within 3 years of the purchase of the new one, this additional tax can be claimed back. There are also several nuances where the additional 3% does not apply in these circumstances in any event, which are often missed.