People often wonder about available reliefs to offset their taxes when it comes to purchasing or selling a property. We will delve into the discussion of SDLT multiple dwellings relief which will help you to learn about offsetting the payments of stamp duty when you plan to make a purchase of several properties at the same time. In such a case the transactions are also done in the same go. This guide will help you to gather imperative information about what is SDLT multiple dwellings relief, how can you be eligible to qualify, and the method to claim MDR. This will help you to reduce your stamp duty land tax.
We recommend finding professional help to further learn about SDLT multiple dwellings relief. Talk to our guys and get your queries answered quickly.
What Is SDLT Multiple Dwellings Relief?
Have you planned to purchase several properties in one transaction? Let’s take the example of an individual who is interested in buying properties from a developer, it can be multiple flats in one transaction. Or an individual who has planned to transfer his properties to a limited company. You have a chance to reduce your tax bills and save money with the help of multiple dwellings relief.
Moreover, with the help of multiple dwellings relief, it is calculated on the average value of your property. The implementation of SDLT is then the rate is related to this average figure now. You are not considering the price of an individual property or the total price of a property purchase. This saves your amount of money and helps to reduce your tax bills. Several people get confused with the term dwelling. In simple words, a dwelling is known to be a flat or a house that provides living shelter to people.
Moreover, regarding multiple dwellings relief, HMRC defines dwellings as a suitable building for one household. The properties that are in the process of construction are also considered dwellings according to HMRC. There are a few types that can come on the list of multiple dwellings relief. See the following listed options:
- The property is mixed-use like a flat that has shops with it.
- An annexe that is self-maintained and was bought with the main house.
- Flats and houses that are purchased in bulk.
How to Qualify For Multiple Dwellings Relief (MDR)?
There is a condition for purchasing two or more properties or dwellings in other words. This process has to be completed with the same transaction. The other option could be a series of linked transactions that are allowed to make you qualify for making multiple dwellings relief. In case a person is up for buying properties that are 2-5 in number. The condition of the residential property will be applied.
On the other hand, if the person is up for buying multiple properties that are 6 or more in numbers. The property could be possibly for commercial purposes or residential. You can opt for no residential SDLT rates that are comparatively lower than the rates of residential SDLT.
Introduction of A Linked Transaction
When the process of buying multiple properties is carried out, the seller and the buyer remain the same in this condition. That is when it comes to the use of linked transactions. Transfer of personal property to your limited company is one such example. It is possible with the help of liked transactions that the value of all the properties is put together and that’s the figure on which SDLT will be applied.
However, the disadvantage of this scenario is that the tax bill will turn out to be higher in comparison to an individual property. This makes multiple dwellings relief a better option to apply on liked transactions.
Learn to Claim Multiple Dwellings Relief
You can save a lot of thousands from stamp duty by applying for multiple dwellings relief. It is advisable to reach out to a solicitor when you are buying a property to claim multiple dwellings relief successfully. In some cases when people overpay in form of stamp duty and realise it later. You have the option of retrospective multiple dwellings relief for a year. The starting date will be the date of filing the case.
Moreover, there will be a requirement to provide solid shreds of evidence for multiple dwellings. The property floor plan and surveyor’s report can help in this matter. You should get help from a property tax expert in case you do not find a reliable solicitor.
The Bottom Line
Now that you have gathered a fair amount of information about SDLT multiple dwellings relief, we can bring the discussion towards wrapping up. It is important to have a basic understanding of multiple dwellings relief to reduce your tax bills and the amount of money you pay as stamp duty. However, the crucial criteria to qualify call for an expert’s help for seamless processing and to make the claim successfully. Most people tend to get the help of solicitors in this regard without knowing the fact that some of the solicitors are not good at handling such a case. It is suggested to speak to a property expert in this case.
This way you will keep yourself protected from overpayment of stamp duty and go under the processor to get the overpaid amount back. We have these few minutes of reading that will help you to handle the SDLT multiple dwellings relief well and it turns out to be advantageous for you.
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Disclaimer: The information about SDLT multiple dwellings relief provided in this blog includes text and graphics of general nature. It does not intend to disregard any of the professional advice.