What the spring budget 2024 means for property taxation

Multiple dwellings relief 

The Finance Bill 2024 will introduce legislation to abolish multiple dwellings relief (MDR).

The change comes into effect for transactions that complete, or substantially perform, on or after 1 June 2024. 

MDR can still be claimed for contracts that exchanged on or before 6 March 2024, regardless of when completion takes place, provided the contract is not varied after that date.

Transactions that take place after MDR is abolished cannot be treated as linked to earlier transactions where tax was calculated in line with the MDR rules.

Read HM Revenue and Customs’ tax information and impact note on MDR

Mixed-property purchases 

 The government confirmed that it will not introduce apportionment for calculating the tax on mixed-property purchases.

SDLT on acquisitions by registered social landlords and public bodies 

The stamp duty land tax (SDLT) exemption for certain acquisitions by registered social landlords (RSLs) in England and Northern Ireland will be updated to remove out-of-date references and update definitions.

This will include updating the public subsidies list to include receipts from the disposal of social housing that re permitted to be reused for social housing provision.

Public bodies will also be removed from the 15% higher rate charge of SDLT.

The changes will come into effect for transactions with an effective date on or after 6 March 2024.

Read HMRC’s tax information and impact note on SDLT rule changes for RSLs and public bodies

First-time buyers’ relief and nominees 

The first-time buyers’ relief rules for transactions involving the grant of a new lease via a nominee or a bare trust will be amended by new legislation.

First-time buyers’ relief will apply to the beneficiary of the arrangements instead of the trustee or nominee purchaser for land transactions involving the grant of a new lease.

Individuals previously granted with a new lease over a dwelling via a nominee or bare trust arrangement will no longer be considered first-time buyers for the purposes of the relief. 

Both changes apply to transactions with an effective date on or after 6 March 2024, with the changes to the definition of “first-time buyer” subject to transitional rules.

Read HMRC’s tax information and impact note on first-time buyers’ relief

Freeport and investment zone tax reliefs 

The window to claim tax reliefs in freeport special tax sites will be extended to:  

• 30 September 2031 for English freeports
• 30 September 2034 for Scottish green freeports and Welsh freeports

The dates will be extended using secondary legislation. 

The tax reliefs available in investment zone special tax sites will be extended from five to 10 years in English, Scottish and Welsh investment zones. 

Reserved Investor Fund

 The government confirmed it will go ahead with tax rules to introduce the 2023 Reserved Investor Fund (RIF) following its earlier consultation.

The changes will start to be introduced in the Finance Bill 2024, followed by secondary legislation to bring in more detailed rules.

 An unauthorised co-ownership contractual scheme that elects into the RIF regime will be treated as a company for SDLT purposes, but a scheme that does not elect into the regime will continue to be treated as transparent.

Seeding relief will be available for RIFs, similar to that available for co-ownership authorised contractual schemes (CoACS).

Read HMRC's tax information and impact note on the RIF