Avoid Overpaying LBTT: Claim Multiple Dwellings Relief Scotland on Your Property Purchase

Asenqua Tech is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

Buying property in Scotland means you’ll almost certainly need to pay Land and Buildings Transaction Tax (LBTT). It’s a tax on property purchases that can add a sizeable chunk to your costs. But if you’re buying more than one property at the same time — such as a block of flats or several houses — there’s a useful relief that can help reduce what you owe. This relief is called Multiple Dwellings Relief Scotland, and it’s worth knowing about to avoid overpaying LBTT.

Let’s take a look at what LBTT is, how Multiple Dwellings Relief Scotland works, and how you can claim it to make sure you’re not paying more tax than necessary.

What is LBTT?

LBTT is a property tax you pay when you buy land or buildings in Scotland. The tax replaced Stamp Duty Land Tax (SDLT) in Scotland back in 2015, and it’s set by the Scottish Government. LBTT works on a tiered system, meaning you pay different rates on different portions of the property price.

As of May 2025, for residential properties, you pay nothing on the first £145,000 of the price, then the rate increases on amounts above that. The rates go up to 12% on the highest bands. So, the more expensive the property, the more LBTT you’ll pay overall.

What is Multiple Dwellings Relief Scotland?

Multiple Dwellings Relief Scotland (often called MDR) lets you calculate your LBTT bill based on the average price of each dwelling instead of the total purchase price.

For example, say you’re buying three flats for £750,000 in total. Instead of paying LBTT on the full £750,000, MDR lets you work out the average price per flat — £250,000 each — and calculate the tax based on that. You then multiply the LBTT due on one flat by the number of flats.

This usually means paying less LBTT than if you were taxed on the full combined price. The relief is particularly beneficial for investors or developers buying multiple units in one go.

Who Can Claim Multiple Dwellings Relief?

You can claim MDR if you buy two or more dwellings in a single transaction or linked transactions (deals closely related and completed within 180 days).

This is common for:

• Purchasing blocks of flats or multiple houses.
• Buying multiple properties from the same seller on the same day.
• Acquiring several properties as part of a development or portfolio.

Keep in mind MDR applies only to residential dwellings. If your purchase includes non-residential property or land, the relief will apply only to the residential part, and the calculation gets a bit more complex.

How Do You Claim MDR?

MDR isn’t applied automatically. When you submit your LBTT return, you need to declare that you’re claiming the relief and provide details about the number of dwellings and their prices.

HM Revenue & Customs (HMRC) provides guidance on the correct way to calculate and declare MDR. You’ll need to:

• Calculate the average price per dwelling.
• Complete the LBTT return accordingly.
• Attach any relevant information about the dwellings.

Because this process can get complicated, it’s wise to get a solicitor or property tax specialist involved. They’ll ensure your claim is accurate and submitted on time, saving you from errors or delays.

Conclusion

Multiple Dwellings Relief Scotland is a valuable tool to reduce LBTT when buying more than one residential property in Scotland. If you’re investing in a portfolio, a block of flats, or multiple homes, make sure you understand MDR and claim it where eligible.

Getting professional help from solicitors or tax advisers early on can make all the difference. They’ll ensure your calculations are correct and your relief claim is properly submitted, helping you avoid overpaying LBTT.

So, before you complete your next property purchase involving multiple dwellings, ask yourself: am I claiming Multiple Dwellings Relief Scotland? If not, you could be paying more tax than you need to.