Guidance

Land Transaction Tax relief for multiple dwellings

Find out when multiple dwellings relief (MDR) for Land Transaction Tax (LTT) applies when you buy property in Wales.

Part of:
Organisation:
Welsh Revenue Authority
First published:
14 June 2021
Last updated:

Contents

Overview

When you buy a property in Wales which is made up of more than one dwelling, in the same transaction (or linked transactions), you’ll be able to claim MDR. The same buyer and seller must be involved in all transactions to claim MDR.

Examples of this include:

  • houses with an annexe
  • a house with a cottage in its grounds
  • 2 neighbouring houses
  • more than one flat in the same building

When you can claim the relief

Every dwelling included in the claim for MDR must meet the test of being a standalone dwelling.

Each dwelling should have its own:

  • kitchen area (somewhere to store, prepare and cook food, and to wash up)
  • bathroom (toilet, sink, and bath or shower)
  • space to live and sleep
  • independent access

Each dwelling should be private and secure. That means you should not be able to move freely from one dwelling to the other, for example, through a common hallway.

If there are interconnecting doors between the dwellings, they should be lockable on the date you buy the property.

Because you’ll be buying more than one dwelling, you’ll need to consider whether you have to pay the higher rates of LTT.

How to claim the relief

You claim MDR on your tax return using the correct code.

If you did not claim it, and later realise you should’ve, you can amend your return and claim a refund of extra tax paid. You can only amend your return to claim MDR within 12 months of the filing date on your original return.

How to calculate tax with the relief

MDR is a partial relief. This means that where it’s claimed, there’ll always be some LTT owed.

You can use our MDR calculator to help you work out how much LTT you’ll pay with a claim for the relief.

Follow these steps 

Calculate the LTT due

  1. Take the total purchase price for all the dwellings and divide it by the number of dwellings you’ve bought. 
  2. Take the figure from step 1 and calculate the tax due based on this amount. You can use our LTT calculator to help you work this out.
  3. Take the figure from step 2 and multiply it by the number of dwellings used in step 1. This gives you the total amount of LTT payable.

Calculate the minimum tax

Where you claim MDR, you must pay a minimum rate of tax. This is calculated as a percentage of the purchase price of the properties. 

The minimum rates are:

  • 1% of the purchase price for transactions before 13 February 2026
  • 3% of the purchase price for transactions on or after 13 February 2026

Read our technical guidance on transitional rules to find out if they apply. 

Compare the amounts

You must pay whichever is higher, the LTT due or the minimum tax calculated.

Example: if the property was bought before 13 February 2026

Mr A buys 2 neighbouring dwellings for £400,000 on the same day from the same seller on 5 January 2026. The higher rates of LTT apply to this transaction.

The total amount of LTT owed when applying MDR is calculated as follows:  

Calculate the LTT due 

  • £400,000 ÷ 2 = £200,000. 
  • £200,000 charged at the higher rates of LTT = £8,700. 
  • £8,700 × 2 = £17,400. 
  • Total LTT = £17,400. 

Calculate the minimum tax

Because properties were purchased before 13 February 2026, the minimum tax rate is 1% and is calculated as: 

  • 1% of £400,000 = £4,000 

Compare the amounts 

  • LTT due using MDR = £17,400. 
  • Minimum tax = £4,000. 
  • The higher amount applies. 
  • Total LTT owed = £17,400. 

Example: if the property was bought on or after 13 February 2026

Miss B buys 2 neighbouring dwellings for £100,000 on the same day from the same seller on 20 February 2026. The higher rates of LTT apply to this transaction.

The total amount of LTT owed when applying MDR is calculated as follows:  

Calculate the LTT due 

  • £100,000 ÷ 2 = £50,000. 
  • £50,000 charged at the higher rates of LTT = £2,500. 
  • £2,500 × 2 = £5,000. 
  • Total LTT = £5,000. 

Calculate the minimum tax 

Because the properties were purchased on or after 13 February 2026, the minimum tax rate is 3% and is calculated as: 

  • 3% of £100,000 = £3,000 

Compare the amounts

  • LTT due using MDR = £5,000. 
  • Minimum tax = £3,000.
  • The higher amount applies.
  • Total LTT owed = £5,000. 

When the relief does not apply

In certain cases, MDR cannot be claimed where some other reliefs can be claimed, even if you decide not to claim for them or withdraw.

MDR is not available for transactions where these reliefs are being claimed:

  • group relief
  • reconstruction and acquisition relief
  • charities relief
  • persons exercising collective rights

MDR is also not available for:

More information

For a more detailed explanation, or if you’re uncertain how the relief applies:

First published

14 June 2021

Last updated

Organisation

Welsh Revenue Authority

Part of