Stamp Duty Land Tax – A cautionary tale

Oct 18, 2022 | Tax Tuesday, Taxation

The mini budget resulted in a number of changes to the Stamp Duty Land Tax (SDLT) regime. These changes to SDLT are one of only two tax cuts that remain in place following yesterday’s emergency statement delivered by new Chancellor Jeremy Hunt. As we approach the Autumn Budget (now termed Medium-Term Fiscal Plan) on 31 October, is there still a chance that these changes could be short-lived?

In this Tax Tuesday we speculate as to upcoming changes to SDLT, by considering the possible outcomes of HMRC’s recent consultation.

But first, here’s a reminder of the current position on SDLT following the mini budget (as originally announced on 23 September 2022).

Mini-Budget round-up

For starters, the residential nil rate tax threshold in England and Northern Ireland was increased to £250,000 in a bid to make purchasing property move affordable – good news for those looking to purchase a second home or make an investment.

The nil rate threshold for First Time Buyers’ Relief was also increased to £425,000 on homes up to a maximum value of £625,000 (increased from £500,000). More good news for those looking to stretch their savings as well as for the ‘Bank of Mum and Dad’ which is considered to be the ninth-largest mortgage lender in the UK.

Note that the additional 3% rate still applies where the buyer is not purchasing their main residence or a replacement main residence.

All of these changes remain in place following the emergency statement delivered by Jeremy Hunt on 17 October (see our updated Mini Budget Report here).

HMRC’s consultation on SDLT

On the 30 November 2021, HMRC launched a consultation to change the way SDLT is calculated for purchases of mixed-property and to reform Multiple Dwellings Relief. The consultation closed on 22 February 2022 but the outcome is yet to be announced. With whispers that the reforms might be part of the Autumn Budget, we look at the current rules and the proposed changes.

Mixed-property purchases

Purchases of both residential and non-residential property are considered ‘mixed-property’ purchases – these tend to be more favourable as lower mixed or ‘commercial’ rates are applied (see table below). Regardless of value, if any aspect of a transaction includes non-residential land then, under the current rules, the whole transaction is subject to the mixed rate.

HMRC have proposed making these rates less generous to mixed-property purchases by either:

  1. apportioning the rates based on the subject matter (i.e. commercial or residential)
  2. introducing a threshold that has to be met for mixed rates to apply (i.e. a minimum portion of non-residential much to included to qualify for mixed rates).

Multiple Dwellings Relief

Multiple Dwellings Relief (MDR) is available on the purchase of two or more dwellings. It is calculated by taking the average value of the dwellings and then multiplying that figure by the number of dwellings. It currently saves buyers significant SDLT by duplicating the availability of lower value SDLT rates.

HMRC have proposed four alternatives for calculating SDLT for multiple dwellings, by either:

  1.  only allowing MDR when all dwellings are purchased for ‘qualifying business use’ (e.g. letting).
  2.  only allowing MDR in respect of dwellings which are purchased for ‘qualifying business use’ (e.g. letting).
  3.  excluding ‘subsidiary dwellings’ from being dwellings for MDR purposes.
  4.  only allowing MDR for three or more dwellings.

Exercising caution

With potential changes to the regime looking likely, we urge anyone relying on the current rules to aim to either exchange or complete before 31 October. Though completion is favourable, if you can exchange by 31 October you may benefit from transitional rules which help to protect transactions that have exchanged prior to any further changes to SDLT.

How can we help?

Questions about tax planning? Contact our team on or call 0161 905 1616.


For reference – Stamp Duty Land Tax Rates

Property values Residential
Pre mini-budget
Post mini-budget
Mixed rates
up to £125,000 0% 0% 0%
£125,001 – £250,000 2% 0% 0%
£250,001 – £925,000 5% 5% 5%
£925,001 – £1,500,000 10% 10% 5%
over £1,500,000 12% 12% 5%

Note: Different rates apply in Scotland under the Land and Buildings Transaction Tax, and in Wales with the Land Transaction Tax.


For reference – Access our updated Mini Budget Report (last updated 17 October 2022)