Q&As

Can multiple dwellings relief (MDR) apply on the acquisition of a property that includes a house and a granny annex in the garden with separate access, but no separate address, council tax banding or title? How does this interact with the 3% higher rates of stamp duty land tax on additional residential properties?

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Produced in partnership with Sean Randall of Blick Rothenberg
Published on LexisPSL on 26/06/2018

The following Tax Q&A produced in partnership with Sean Randall of Blick Rothenberg provides comprehensive and up to date legal information covering:

  • Can multiple dwellings relief (MDR) apply on the acquisition of a property that includes a house and a granny annex in the garden with separate access, but no separate address, council tax banding or title? How does this interact with the 3% higher rates of stamp duty land tax on additional residential properties?

Stamp duty land tax (SDLT) multiple dwellings relief (MDR) applies to the acquisition of more than one dwelling: see Practice Note: SDLT—multiple dwellings relief.

For the purposes of the relief, a building or part of a building is a dwelling if, among other things, it is suitable for use as a single dwelling; and land that is occupied or enjoyed with a dwelling as a garden or grounds (including any building on such land) is taken to be part of the dwelling. Obviously, the main house is a dwelling. It is less clear whether the granny annex is part of that dwelling or is a separate dwelling, especially where it does not have a separate address, council tax or title. The short answer is that HMRC may regard it as a separate dwelling if it is physically suitable for use as a separate dwelling (ie if an occupier of the annex could live independently of an occupier of the main house) even if it cannot be sold independently of the main house and is not recognised as a separate dwelling for council tax purposes. But this is utt

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