A purchaser pays land tax on the total consideration paid for the properties.  This could result in higher amounts of land tax payable when a number of dwellings are purchased as part of the same transaction, or linked transaction, from the same seller.  Multiple Dwellings Relief can reduce the amount of tax payable.  The relief attempts to align the land tax due with the amount that would have been payable, if the properties were purchased in single transactions from different vendors.

• Calculation Method: The rate of tax is worked out firstly by taking the average acquisition figure; i.e. divide the total acquisition figure by the number of dwellings purchased.  Secondly, work out the land tax on the average acquisition figure and multiply this amount by the number of dwellings acquired

• Eligibility: To qualify for multiple dwellings relief, purchasers must acquire two or more residential properties in a single transaction. The relief is typically available for both freehold and leasehold properties.  The properties must be purchased under a single transaction, or a series of linked transactions, between the same buyer and seller.  

Six or More Dwellings

Where there is a contract for the single acquisition of six or more dwellings as part of the same transaction, this is treated as a non-residential transaction for land tax purposes.  This can be used as an alternative to Multiple Dwellings relief. You apply the following non-residential (or mixed) property land tax calculation to the whole transaction, with each rate applied to the portion of the acquisition that falls within each rate band(England & Northern Ireland):

• 0% rate of tax. Where the price or premium so much as does not exceed £150,000.

• 2% rate of tax. Where the price or premium so much as exceeds £150,000 but does not exceed £250,000.

• 5% rate of tax. The remainder (if any).

You can choose the lowest amount of land tax payable by applying mutliple dwellings relief or calculating the amount using the non-residential rate above.

Navigating the complexities of land tax relief for multiple dwellings requires professional guidance. At Mirador our certified tax advisors ensure compliance with regulations, provide accurate calculations, and the optimal utilisation of available reliefs.