Multiple Dwelling Relief Guide

Introduction

Stamp Duty Land Tax (SDLT) is a tax on the purchase of a property in England and Northern Ireland. There are some exemptions and reduced rates for this tax, and one important relief is Multiple Dwellings Relief or “MDR” – a reduction in SDLT if there is more than one dwelling in the purchase.

The calculation of the SDLT rates on multiple dwelling purchases, and what constitutes a ‘single dwelling’, can be complex and best handled by an experienced tax lawyer. It is important to know whether a claim for MDR can be made at the time of purchase so that the claim can be made in the SDLT return and the reduced amount of SDLT paid.

Alternatively, buyers may discover that they were eligible for Multiple Dwellings Relief from SDLT only after their purchase and seek to claim back their tax payment from HMRC by amending their return.

If you are seeking advice on claiming Multiple Dwellings Relief, contact us using the form on this page.

What this guide covers

This guide to Multiple Dwelling Relief sets out the main criteria that need to be satisfied in order to make a claim for MDR. For each criterion, the guide sets out the relevant HMRC-published guidance on MDR and then what recent tax tribunal decisions have had to say about these points. You can use the two columns in the centre of the chart to record notes about the relevant features of the properties you are buying to help you decide if you might qualify for MDR.

Last updated 04th July 2022

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Relevant Features	HMRC's Published Guidance	Case Law
Suitability for use as a dwelling	SDLTM00410: The test of whether a property is “suitable for use” as a single dwelling is a more stringent test than whether it forms a self-contained part of a larger dwelling. Furthermore, whether or not it is suitable for use as a single dwelling requires consideration of whether it is sufficiently independent to be considered a dwelling on its own. In the case where a building is considered to contain more than one dwelling, evidence will be needed to show that each ‘dwelling’ in question is sufficiently independent to count as a separate dwelling in its own right. In the absence of sufficient evidence, it may be decided that it is more appropriate to consider that there is one dwelling, not two or more. SDLTM00410	47. The HMRC internal manuals on SDLT contain various statements relating to the meaning of “dwelling” and “suitable for use as a single dwelling”, but these merely record HMRC’s views and do not inform the proper construction of the statute. 48. We must therefore interpret the phrase giving the language used its normal meaning and taking into account its context. Adopting that approach, we make the following observations as to the meaning of “suitable for use as a single dwelling”: (1) The word “suitable” implies that the property must be appropriate or fit for use as a single dwelling. It is not enough if it is capable of being made appropriate or fit for such use by adaptations or alterations. That conclusion follows in our view from the natural meaning of the word “suitable”, but also finds contextual support in two respects. First, paragraph 7(2)(b) provides that a dwelling is also a single dwelling if “it is in the process of being constructed or adapted” for use as single dwelling. So, the draftsman has contemplated a situation where a property requires change, and has extended the definition (only) to a situation where the process of such construction or adaption has already begun. This strongly implies that a property is not suitable for use within paragraph 7(2)(a) if it merely has the capacity or potential with adaptations to achieve that status. Second, SDLT being a tax on chargeable transactions, the status of a property must be ascertained at the effective date of the transaction, defined in most cases (by section 119 FA 2003) as completion. So, the question of whether the property is suitable for use as a single dwelling falls to be determined by the physical attributes of the property as they exist at the effective date, not as they might or could be. A caveat to the preceding analysis is that a property may be in a state of disrepair and nevertheless be suitable for use as either a dwelling or a single dwelling if it requires some repair or renovation; that is a question of degree for assessment by the FTT. (2) The word “dwelling” describes a place suitable for residential accommodation which can provide the occupant with facilities for basic domestic living needs. Those basic needs include the need to sleep and to attend to personal and hygiene needs. The question of the extent to which they necessarily include the need to prepare food should be dealt with in an appeal where that issue is material. (3) The word “single” emphasises that the dwelling must comprise a separate self-contained living unit. (4) The test is objective. The motives or intentions of particular buyers or occupants of the property are not relevant. (5) Suitability for use as a single dwelling is to be assessed by reference to suitability for occupants generally. It is not sufficient if the property would satisfy the test only for a particular type of occupant such as a relative or squatter. (6) The test is not “one size fits all”: a development of flats in a city centre may raise different issues to an annex of a country property. What matters is that the occupant’s basic living needs must be capable of being satisfied with a degree of privacy, self-sufficiency and security consistent with the concept of a single dwelling. How that is achieved in terms of bricks and mortar may vary. (7) The question of whether or not a property satisfies the above criteria is a multi-factorial assessment, which should take into account all the facts and circumstances. Relevant facts and circumstances will obviously include the physical attributes of and access to the property, but there is no exhaustive list which can be reliably laid out of relevant factors.Ultimately, the assessment must be made by the FTT as the fact-finding tribunal, applying the principles set out above. Upper Tribunal Fiander 106. In the context of SDLT, a person buying a property would want and expect that property to contain all the facilities for them to live a separate and independent life, including facilities for the preparation of food, and they would expect to be able to prevent others from entering their property. 107. In assessing whether this test is satisfied, one might ask whether an owner of what was said to be two dwellings was reasonably likely to be able to sell them to unconnected purchasers, assuming that the properties would remain as they were at the EDT. It seems to me that an average purchaser would not buy the annexe, on this basis, because it has no kitchen facilities and an average purchaser would not buy the main house because it lacks privacy and security. Mobey
Sleeping Area	A dwelling would be expected to have an area available for sleeping. A room to sleep would normally have lighting, power points, and a window and be of a reasonable size. It will normally be separated from a ‘living area. SDLTM00425	53. We begin with the physical characteristics of the property that point towards main house and annex each being suitable for use a single dwelling. 54. The physical attributes of both main house and annex were ample to accommodate the basic domestic living needs of occupants of either; the annex was obviously smaller than the main house, but it adequately accommodated sleeping, eating, cooking, and washing and sanitary needs, not to mention a place to sit and relax; and the main house provided these on a larger scale. First Tier Tribunal Fiander
Living Area	A dwelling would be expected to have a suitable area for day-to-day living, including space for chairs, tables, cupboards, furniture and to have visitors. The room would normally have lighting, power points, heating and a window. SDLTM00425	53. We begin with the physical characteristics of the property that point towards main house and annex each being suitable for use a single dwelling. 54. The physical attributes of both main house and annex were ample to accommodate the basic domestic living needs of occupants of either; the annex was obviously smaller than the main house, but it adequately accommodated sleeping, eating, cooking, and washing and sanitary needs, not to mention a place to sit and relax; and the main house provided these on a larger scale. First Tier Tribunal Fiander
Kitchen	A dwelling would be expected to have an area where a meal can be prepared and somewhere suitable to eat it (not necessarily in the same place). It is not necessary for a kitchen to have a cooker or white goods such as a fridge or dishwater present at the effective date of the transaction, because these are sometimes removed on a house sale. However, there should be space and infrastructure in place e.g. plumbing for sink, power source for cooker etc. SDLTM00425	A lack of food preparation and washing up facilities weighs against being suitable for use as a single dwelling, although it is not determinative. [90] Wilkinson [103] 103. Not all of these factors have equal weight. The most important factors seem to me to be the lack of privacy and security for the main house and the lack of food preparation facilities in the annexe. Mobey [27] (12) Objectively, there are sufficient facilities to store food, including fresh food storage in a fridge. There is a sink and a small work top to enable preparation to take place. The area is small but that is not significant. (13) The issue is whether food could safely be cooked in the kitchen to enable the premises to be regarded as suitable for use as a dwelling. The arrangements would have to be capable of satisfying building and fire regulations to allow the annex to be lawfully let. I found it incredible that Mrs Mullane had no knowledge, more than two years after making the claim for MDR in respect of the annex, whether any building regulation control or fire certificates would be required to lawfully let the annex. HMRC had raised the issue of fire safety but not identified specific regulatory impediments to the lawful letting of the property. (14) In my experience an electric accessory should be positioned to enable safe operation and avoid the harmful effects of heat, and steam from cooking activities or splashing from use of a sink or wash basin and that a cooker should be a suitable distance away from the sink. (15) The photographs of the location of the cooker in the annex attached to the second witness statement of Mrs Mullane show: (a) The cooker standing on a low table immediately in front of the sink and between the sink and the bannister. (b) There is very little space, if any, on either side of the cooker. (c) The bottom of the cooker is just below the level of the sink. (d) The cooker is about 12 inches high and comprises a grill/oven and two hobs on top. (16) I cannot see how the cooker can be safely operated in order to avoid splashes from the sink, nor now the hobs can be operated safely given the height of the cooker. I would have the same concerns if the microwave were placed on the counter by the sink or replaced the large cooker on the table in front of the sink. (17) HMRC raised concerns about the open-plan nature of the kitchen from a fire prevention perspective. I share those concerns. Fire alarms and fire doors would be needed to give the occupants of the upper room time to escape in case of fire. (18) In my view, MDR is capable of being claimed in a situation where premises are capable of satisfying building regulations but all that is required at completion is for a certificate to be obtained. Mullane (82).However, the reasonable observer would consider the following features to indicate the Annexe was not suitable for use as a dwelling: (1) the Annexe did not have any equipment or identifiable area for the preparation, eating or storage of food, that is no work surfaces, kitchen units, tables or chairs; (2) there was no high-power electrical connections for installing a cooker, oven or hob; (3) there was no sink in the main room for washing food, crockery, cooking equipment and so on; (4) there was no plumbing for installing a washing machine or dishwasher; (5) – (7)…… (83).In our view a reasonable observer would consider the presence of kitchen facilities - being those features listed at paragraph (82)(1)-(4) above - as an important factor in determining whether the Annexe suitable for use as a dwelling. 84.The Appellant argued that the test as to what is suitable for use as a dwelling should adapt as modern habits change and, for a number of reasons, people now did not use conventional cookers as much. The Appellant made much of how his family and visitors had not used the oven and hob because they used the convection microwave, ate out or ordered takeaways. Further they did not use the washing machine in the Annexe as they sent their washing out to a laundry. Any washing of dishes was done in the sink in the bathroom. (85) We accept that the Appellant’s family lifestyle and that of visitors using the Annexe on a temporary basis did not require the use of a conventional cooker or a washing machine but the test is that of occupants in general and whether viewed objectively they would find the property suitable for use as a dwelling. We do not accept that the Appellant’s family lifestyle is representative of occupants in general who would, on an ongoing basis require more than a convection microwave for cooking and washing up in a hand basin in the bathroom. (86) We do accept as does HMRC, that it is not necessary for the property to have installed at the property on the effective date the conventional white goods of cooker (or hob and oven), fridge, washing machine and so on. Nor is it necessary for the property to have fixed worksurfaces and storage of the kind subsequently fitted by the Appellant as they can be freestanding and still serve the same purpose. White goods and loose tables will often be retained by the seller.Jonathan Ralph
Other eg. Short Connecting Corridor		“Due to the short, open corridor connecting them, the main house and annex were simply too closely physically connected for either to be suitable for use as a “single” dwelling. Rather – and this, indeed, is how the property was marketed, on the evidence of the “rightmove” materials – the property was eminently suitable for use as one joined dwelling.” [62] First Tier Tribunal Fiander
Other eg. Split accommodation		“…the occupants of the main house, on route to or from the bathroom at night and perhaps in some state of undress, potentially meeting occupants of the annexe in the communal areas of the Property is not a fanciful notion but a very real one given the layout of the Property.” [83] Andrew Doe “..the fact that the occupier of the Disputed Area would need to walk outside to go from the Bedroom to the Utility Room and the Utility Room. This issue is exacerbated by the fact that the Utility Room has not been shown to be suitable for sitting in to eat as it contains a toilet and on the basis of the photographs and plan has insufficient space for seating. The occupier would therefore need to carry food prepared in the Utility Room back to the Bedroom to eat. This consequently undermines the coherence of the Disputed Area as a single dwelling;” [81] Wilkinson
Independent Entrances	It is important that each dwelling has sufficiently independent access. This could be a separate entrance from the outside of the building, or from common parts of the building such as in the case of flats. Typically, there will be common parts (such as hallways and staircases) which each dwelling will have access to via a lockable door. SDLTM00425	27. This issue must be determined by considering all the facts which I have outlined at [8] above. I comment on those facts as follows: (1) The shared use of the glass conservatory between the main house and the annex is irrelevant. It is a common feature in the UK housing market that two separate dwellings can share a common entrance and hall. It is irrelevant that the previous owner created the glass conservatory to link the main house to the annex for the better enjoyment by the main house of the annex. The motives of the previous owner are not relevant to the issue to be determined at the date of completion of the purchase by the Appellants. (2) The glass conservatory is operating as the dividing line between the main house and the annex. It provides an effective geographic separation of the two parts. 9 (3) The annex has its own front entrance which is accessed via the shared glass conservatory. There is also a rear access via a patio. This is compatible with the annex being suitable for use as a separate dwelling. (4) The main house has its own front entrance and further entrances via the shared glass conservatory each of which has its own lock. This is compatible with the main house being suitable for use as a separate dwelling. The occupants would enjoy the necessary security. (5) In terms of necessary security required by a tenant of the annex vis a vis the outside world, the lock on the glass conservatory door and the security lantern outside would provide adequate protection. I expect that every tenant would also require a lock on the door to the annex to secure the tenant’s privacy against the occupant of the main house but I think that alone would not prevent the annex being regarded as suitable for use as a dwelling at completion albeit that a lock would be needed after completion. Mullane
Privacy and interconnecting doors	A single dwelling requires a degree of privacy from other dwellings. It is unusual, but possible, for adjoining dwellings to have interconnecting doors. It is relevant whether the door between the parts can be locked, or is readily capable of being made secure from both sides. The more interconnecting doors that there are between “units” the less likely they could be reasonably considered to be separate single dwellings. The type of door is also important to consider e.g. whether the door has adequate fire proofing and sound proofing to be considered suitable to separate the dwellings. SDLTM00425	Lockable doors – “weighs heavily” [90] and “fundamental issue” [93] : Wilkinson 27. This issue must be determined by considering all the facts which I have outlined at [8] above. I comment on those facts as follows: (1) The shared use of the glass conservatory between the main house and the annex is irrelevant. It is a common feature in the UK housing market that two separate dwellings can share a common entrance and hall. It is irrelevant that the previous owner created the glass conservatory to link the main house to the annex for the better enjoyment by the main house of the annex. The motives of the previous owner are not relevant to the issue to be determined at the date of completion of the purchase by the Appellants. (2) The glass conservatory is operating as the dividing line between the main house and the annex. It provides an effective geographic separation of the two parts. (3) The annex has its own front entrance which is accessed via the shared glass conservatory. There is also a rear access via a patio. This is compatible with the annex being suitable for use as a separate dwelling. (4) The main house has its own front entrance and further entrances via the shared glass conservatory each of which has its own lock. This is compatible with the main house being suitable for use as a separate dwelling. The occupants would enjoy the necessary security. (5) In terms of necessary security required by a tenant of the annex vis a vis the outside world, the lock on the glass conservatory door and the security lantern outside would provide adequate protection. I expect that every tenant would also require a lock on the door to the annex to secure the tenant’s privacy against the occupant of the main house but I think that alone would not prevent the annex being regarded as suitable for use as a dwelling at completion albeit that a lock would be needed after completion. Mullane 94. The factors indicating that Glenmore is one dwelling not two are as follows. 95. ....... 96. The occupants of the main house could not deny entry to the occupants of the annexe. The door between the annexe and the reception hall could not be locked on the main house side, compromising the privacy and security of the occupants of the main house. Mobey
Control of Utilities	A single dwelling should be able to control all or most of the utility services supplied to it. Where a property has a physical configuration which suggests it might be considered two dwellings (“main property” and “annex”) but very few or no utilities can be controlled by the annex-dwellers without needing to enter another dwelling to do so, it is likely that the “annex” should not be considered a single dwelling in its own right. SDLTM00430	“…we have not put a great deal of weight on the evidence that the annex had no separate utility meters or council tax status – this points in the same direction as our conclusion, but we did not place great weight on these factors. Similarly, we did not place great weight on the evidence of a separate postal address for the annex (we acknowledge that the sending of post to the annex was supportive of its “single” status, but do not consider this a very significant factor).” [69] First Tier Tribunal Fiander
Electricity	Electricity Dwellings should have an electricity supply which can be switched on and off from its own consumer unit, within the dwelling or a communal area. SDLTM00430	56. The Tribunal considers that for the annex to be considered a separate unit there would need to be separate meters for both water and electricity. The Appellant would not be pleased if a tenant decided to leave the taps running all night and the electric radiator running 24 hours a day all year round. First Tier Tribunal Dreyfus
Cold Water	Dwellings require a supply of water fit for human consumption/use. The water supply should be able to be turned off from its own stop tap, accessible from within the dwelling or in a communal area. SDLTM00430
Heating	Dwellings will normally have their own independent system(s) for heating, although supplies may occasionally be shared, perhaps by way of a renewable energy scheme. A dwelling would be expected to be able to manage and turn their own heating system on or off (for example whilst works are done) without having to go through another dwelling. SDLTM00430	“…the fact that the hot water control and part of the control for the central heating is located in the Utility Room with no separate control for the Main Property. Realistically arrangements would have to be put in place to allow the Main Property access to those controls and to agree the settings to be applied to the hot water and heating, or to agree that the occupier of the Disputed Area controlled those settings. No such arrangements were in place at the time of the purchase of the Property and the feasibility of the occupiers of the Main Property being satisfied to proceed on any such basis must be in very real doubt if the Disputed Area was occupied by people with no family connections or other bonds. I am satisfied that the phrase use as a “single dwelling” implies that the property in question should be capable of being occupied by independent third parties.” [81] Wilkinson
Gas	Where a dwelling has a gas supply, they should be able to isolate it from within their property or from a shared area. SDLTM00430
Legal Constraints	The property may be subject to legal conditions, including planning restrictions and restrictive covenants, whether public or private law, which inhibit use as a separate dwelling. These conditions will be a factor in considering suitability of use as a dwelling, although where these conditions are not being respected for any reason, actual use will prove more helpful than theoretical use.	We placed no weight on the evidence regarding the “restrictive covenant” in the land registry, which was unclear in itself and in its implications for the issues at hand.” [69] First Tier Tribunal Fiander
Council Tax	Where a property has been assessed for council tax purpose as comprising more than one dwelling, this is an indicator that for SDLT purposes there also may be more than one dwelling. However, the definition of dwelling for council tax purposes is different from that of Stamp Duty Land Tax, and hence this factor will not be a strong indicator on its own. SDLTM00430	The lack of a separate postal address or Council Tax assessment has little impact. [83] Wilkinson “…we have not put a great deal of weight on the evidence that the annex had no separate utility meters or council tax status – this points in the same direction as our conclusion, but we did not place great weight on these factors. Similarly, we did not place great weight on the evidence of a separate postal address for the annex (we acknowledge that the sending of post to the annex was supportive of its “single” status, but do not consider this a very significant factor).” [69] First Tier Tribunal Fiander (8) That there is only one council tax bill would not prevent the annex from being regarded as being suitable for use as a dwelling at completion. If the annex had already been in use as a separate dwelling before completion, separate council tax registration at completion might be required to qualify for MDR. However, in this case the claim for MDR is on the basis that the property is suitable for use as a dwelling, and that implies that the separate council tax registration is not required at completion and can be obtained as that must be a mere formality. Mullane
Marketing Materials	Estate agents marketing material is a useful tool to assist in consideration of how many dwellings a property might comprise. However, an estate agents’ main objective is in selling the property, not in providing legislatively accurate definitions of dwellings, so this information is not determinative. SDLTM00430	102. The estate agent’s particulars presented Glenmore as a single property with a lower ground floor which comprised a swimming pool, snug, two guest bedrooms and an integral garage. 103. Not all of these factors have equal weight. The most important factors seem to me to be the lack of privacy and security for the main house and the lack of food preparation facilities in the annexe. I also consider the description of the building for which planning permission was granted and the way in which the advertising materials presented the property to be important. Both strongly suggest that Glenmore was a single dwelling and the whole of Glenmore was certainly suitable for use as a single dwelling. Mobey [62] Due to the short, open corridor connecting them, the main house and annex were simply too closely physically connected for either to be suitable for use as a “single” dwelling. Rather – and this, indeed, is how the property was marketed, on the evidence of the “rightmove” materials – the property was eminently suitable for use as one joined dwelling. First Tier Tribunal Fiander
Seperate Posts and Bills	Individual letter boxes, utility bills and phone bills will all provide some evidence of separate dwellings, but a lack of them will not be a deciding factor to determine that there aren’t separate single dwellings. SDLTM00430	The lack of a separate postal address or Council Tax assessment has little impact [83] Wilkinson "…we have not put a great deal of weight on the evidence that the annex had no separate utility meters or council tax status – this points in the same direction as our conclusion, but we did not place great weight on these factors. Similarly, we did not place great weight on the evidence of a separate postal address for the annex (we acknowledge that the sending of post to the annex was supportive of its “single” status, but do not consider this a very significant factor).” [69] First Tier Tribunal Fiander (9) That there is a single utility bill would not be an absolute barrier to the letting of the accommodation to a tenant. Given Mrs Mullane has experience of consumption of water, gas and electricity I infer she will be able to identify the consumption by a tenant of the annex and it is not uncommon for the utility bills to be included in the rent. I expect that the lack of separate meters would be a barrier to sell the annex to a purchaser. But given the objective of the legislation is to increase the number of properties available to rent that would not be an impediment to claim MDR. Mullane
Suitability for Airbnb use		(21) Taking air bnb guests would not be sufficient to demonstrate the purpose of the legislation was met as in my experience such guests expect breakfast to be provided and do not expect to cook breakfast themselves. Mullane Airbnb usage 54. In other decided MDR appeal cases, the argument has been advanced on the premise that if the purported second dwelling is suitable for use by Airbnb users, then it meets the suitability test for use as a dwelling. It is for this reason that I have considered the merits of such premise by deliberating over the purposive construction of the term ‘dwelling’ in the SDLT context. 55. I do not doubt that the Annexe in question has been found to be suitable accommodation by Airbnb users. However, the relevant comparator of suitability for Airbnb usage is hotel accommodation, which falls to be categorised as non-residential property. The commonality between hotel and Airbnb is the temporary nature of the accommodation in terms of days, or a week or two at a time, rather than months. In contrast, a place suitable for use as a dwelling is a place where ‘one lives, regarding and treating it as home’. Whilst a place suitable for use as a dwelling is undoubtedly suitable for Airbnb usage, the converse is not self-evident, as illustrated by the factual matrix in the present case. Dower [It may be asked whether these judicial remarks in Mullane and Dower reflect the experience of most users of Airbnb]

Relevant Features

HMRC's Published Guidance

Facts – Annex or Outbuilding

Facts – Main Dwelling

Case Law

Suitability for use as a dwelling

SDLTM00410: The test of whether a property is “suitable for use” as a single dwelling is a more stringent test than whether it forms a self-contained part of a larger dwelling. Furthermore, whether or not it is suitable for use as a single dwelling requires consideration of whether it is sufficiently independent to be considered a dwelling on its own. In the case where a building is considered to contain more than one dwelling, evidence will be needed to show that each ‘dwelling’ in question is sufficiently independent to count as a separate dwelling in its own right. In the absence of sufficient evidence, it may be decided that it is more appropriate to consider that there is one dwelling, not two or more. SDLTM00410

47. The HMRC internal manuals on SDLT contain various statements relating to the meaning of “dwelling” and “suitable for use as a single dwelling”, but these merely record HMRC’s views and do not inform the proper construction of the statute.

48. We must therefore interpret the phrase giving the language used its normal meaning and taking into account its context. Adopting that approach, we make the following observations as to the meaning of “suitable for use as a single dwelling”:

(1) The word “suitable” implies that the property must be appropriate or fit for use as a single dwelling. It is not enough if it is capable of being made appropriate or fit for such use by adaptations or alterations. That conclusion follows in our view from the natural meaning of the word “suitable”, but also finds contextual support in two respects. First, paragraph 7(2)(b) provides that a dwelling is also a single dwelling if “it is in the process of being constructed or adapted” for use as single dwelling.

So, the draftsman has contemplated a situation where a property requires change, and has extended the definition (only) to a situation where the process of such construction or adaption has already begun. This strongly implies that a property is not suitable for use within paragraph 7(2)(a) if it merely has the capacity or potential with adaptations to achieve that status. Second, SDLT being a tax on chargeable transactions, the status of a property must be ascertained at the effective date of the transaction, defined in most cases (by section 119 FA 2003) as completion. So, the question of whether the property is suitable for use as a single dwelling falls to be determined by the physical attributes of the property as they exist at the effective date, not as they might or could be. A caveat to the preceding analysis is that a property may be in a state of disrepair and nevertheless be suitable for use as either a dwelling or a single dwelling if it requires some repair or renovation; that is a question of degree for assessment by the FTT.

(2) The word “dwelling” describes a place suitable for residential accommodation which can provide the occupant with facilities for basic domestic living needs. Those basic needs include the need to sleep and to attend to personal and hygiene needs. The question of the extent to which they necessarily include the need to prepare food should be dealt with in an appeal where that issue is material.

(3) The word “single” emphasises that the dwelling must comprise a separate self-contained living unit.

(4) The test is objective. The motives or intentions of particular buyers or occupants of the property are not relevant.

(5) Suitability for use as a single dwelling is to be assessed by reference to suitability for occupants generally. It is not sufficient if the property would satisfy the test only for a particular type of occupant such as a relative or squatter.

(6) The test is not “one size fits all”: a development of flats in a city centre may raise different issues to an annex of a country property. What matters is that the occupant’s basic living needs must be capable of being satisfied with a degree of privacy, self-sufficiency and security consistent with the concept of a single dwelling. How that is achieved in terms of bricks and mortar may vary.

(7) The question of whether or not a property satisfies the above criteria is a multi-factorial assessment, which should take into account all the facts and circumstances. Relevant facts and circumstances will obviously include the physical attributes of and access to the property, but there is no exhaustive list which can be reliably laid out of relevant factors.Ultimately, the assessment must be made by the FTT as the fact-finding tribunal, applying the principles set out above.

Upper Tribunal Fiander

106. In the context of SDLT, a person buying a property would want and expect that property to contain all the facilities for them to live a separate and independent life, including facilities for the preparation of food, and they would expect to be able to prevent others from entering their property.

107. In assessing whether this test is satisfied, one might ask whether an owner of what was said to be two dwellings was reasonably likely to be able to sell them to unconnected purchasers, assuming that the properties would remain as they were at the EDT. It seems to me that an average purchaser would not buy the annexe, on this basis, because it has no kitchen facilities and an average purchaser would not buy the main house because it lacks privacy and security. Mobey

Sleeping Area

A dwelling would be expected to have an area available for sleeping. A room to sleep would normally have lighting, power points, and a window and be of a reasonable size. It will normally be separated from a ‘living area. SDLTM00425

53. We begin with the physical characteristics of the property that point towards main house and annex each being suitable for use a single dwelling.

54. The physical attributes of both main house and annex were ample to accommodate the basic domestic living needs of occupants of either; the annex was obviously smaller than the main house, but it adequately accommodated sleeping, eating, cooking, and washing and sanitary needs, not to mention a place to sit and relax; and the main house provided these on a larger scale. First Tier Tribunal Fiander

Living Area

A dwelling would be expected to have a suitable area for day-to-day living, including space for chairs, tables, cupboards, furniture and to have visitors. The room would normally have lighting, power points, heating and a window. SDLTM00425

Kitchen

A dwelling would be expected to have an area where a meal can be prepared and somewhere suitable to eat it (not necessarily in the same place). It is not necessary for a kitchen to have a cooker or white goods such as a fridge or dishwater present at the effective date of the transaction, because these are sometimes removed on a house sale. However, there should be space and infrastructure in place e.g. plumbing for sink, power source for cooker etc. SDLTM00425

A lack of food preparation and washing up facilities weighs against being suitable for use as a single dwelling, although it is not determinative. [90] Wilkinson [103] 103. Not all of these factors have equal weight. The most important factors seem to me to be the lack of privacy and security for the main house and the lack of food preparation facilities in the annexe. Mobey [27]

(12) Objectively, there are sufficient facilities to store food, including fresh food storage in a fridge. There is a sink and a small work top to enable preparation to take place. The area is small but that is not significant.

(13) The issue is whether food could safely be cooked in the kitchen to enable the premises to be regarded as suitable for use as a dwelling. The arrangements would have to be capable of satisfying building and fire regulations to allow the annex to be lawfully let. I found it incredible that Mrs Mullane had no knowledge, more than two years after making the claim for MDR in respect of the annex, whether any building regulation control or fire certificates would be required to lawfully let the annex. HMRC had raised the issue of fire safety but not identified specific regulatory impediments to the lawful letting of the property.

(14) In my experience an electric accessory should be positioned to enable safe operation and avoid the harmful effects of heat, and steam from cooking activities or splashing from use of a sink or wash basin and that a cooker should be a suitable distance away from the sink.

(15) The photographs of the location of the cooker in the annex attached to the second witness statement of Mrs Mullane show:
(a) The cooker standing on a low table immediately in front of the sink and between the sink and the bannister.
(b) There is very little space, if any, on either side of the cooker.
(c) The bottom of the cooker is just below the level of the sink.
(d) The cooker is about 12 inches high and comprises a grill/oven and two hobs on top.

(16) I cannot see how the cooker can be safely operated in order to avoid splashes from the sink, nor now the hobs can be operated safely given the height of the cooker. I would have the same concerns if the microwave were placed on the counter by the sink or replaced the large cooker on the table in front of the sink.

(17) HMRC raised concerns about the open-plan nature of the kitchen from a fire prevention perspective. I share those concerns. Fire alarms and fire doors would be needed to give the occupants of the upper room time to escape in case of fire.

(18) In my view, MDR is capable of being claimed in a situation where premises are capable of satisfying building regulations but all that is required at completion is for a certificate to be obtained. Mullane

(82).However, the reasonable observer would consider the following features to indicate the Annexe was not suitable for use as a dwelling:
(1) the Annexe did not have any equipment or identifiable area for the preparation, eating or storage of food, that is no work surfaces, kitchen units, tables or chairs;
(2) there was no high-power electrical connections for installing a cooker, oven or hob;
(3) there was no sink in the main room for washing food, crockery, cooking equipment and so on;
(4) there was no plumbing for installing a washing machine or dishwasher;
(5) – (7)……

(83).In our view a reasonable observer would consider the presence of kitchen facilities - being those features listed at paragraph

(82)(1)-(4) above - as an important factor in determining whether the Annexe suitable for use as a dwelling.

84.The Appellant argued that the test as to what is suitable for use as a dwelling should adapt as modern habits change and, for a number of reasons, people now did not use conventional cookers as much. The Appellant made much of how his family and visitors had not used the oven and hob because they used the convection microwave, ate out or ordered takeaways. Further they did not use the washing machine in the Annexe as they sent their washing out to a laundry. Any washing of dishes was done in the sink in the bathroom.

(85) We accept that the Appellant’s family lifestyle and that of visitors using the Annexe on a temporary basis did not require the use of a conventional cooker or a washing machine but the test is that of occupants in general and whether viewed objectively they would find the property suitable for use as a dwelling. We do not accept that the Appellant’s family lifestyle is representative of occupants in general who would, on an ongoing basis require more than a convection microwave for cooking and washing up in a hand basin in the bathroom.

(86)

We do accept as does HMRC, that it is not necessary for the property to have installed at the property on the effective date the conventional white goods of cooker (or hob and oven), fridge, washing machine and so on. Nor is it necessary for the property to have fixed worksurfaces and storage of the kind subsequently fitted by the Appellant as they can be freestanding and still serve the same purpose. White goods and loose tables will often be retained by the seller.Jonathan Ralph

Other eg. Short Connecting Corridor

“Due to the short, open corridor connecting them, the main house and annex were simply too closely physically connected for either to be suitable for use as a “single” dwelling. Rather – and this, indeed, is how the property was marketed, on the evidence of the “rightmove” materials – the property was eminently suitable for use as one joined dwelling.”

[62] First Tier Tribunal Fiander

Other eg. Split accommodation

“…the occupants of the main house, on route to or from the bathroom at night and perhaps in some state of undress, potentially meeting occupants of the annexe in the communal areas of the Property is not a fanciful notion but a very real one given the layout of the Property.” [83] Andrew Doe

“..the fact that the occupier of the Disputed Area would need to walk outside to go from the Bedroom to the Utility Room and the Utility Room. This issue is exacerbated by the fact that the Utility Room has not been shown to be suitable for sitting in to eat as it contains a toilet and on the basis of the photographs and plan has insufficient space for seating. The occupier would therefore need to carry food prepared in the Utility Room back to the Bedroom to eat. This consequently undermines the coherence of the Disputed Area as a single dwelling;” [81] Wilkinson

Independent Entrances

It is important that each dwelling has sufficiently independent access. This could be a separate entrance from the outside of the building, or from common parts of the building such as in the case of flats. Typically, there will be common parts (such as hallways and staircases) which each dwelling will have access to via a lockable door. SDLTM00425

27. This issue must be determined by considering all the facts which I have outlined at [8] above. I comment on those facts as follows:

(1) The shared use of the glass conservatory between the main house and the annex is irrelevant. It is a common feature in the UK housing market that two separate dwellings can share a common entrance and hall. It is irrelevant that the previous owner created the glass conservatory to link the main house to the annex for the better enjoyment by the main house of the annex. The motives of the previous owner are not relevant to the issue to be determined at the date of completion of the purchase by the Appellants.

(2) The glass conservatory is operating as the dividing line between the main house and the annex. It provides an effective geographic separation of the two parts. 9

(3) The annex has its own front entrance which is accessed via the shared glass conservatory. There is also a rear access via a patio. This is compatible with the annex being suitable for use as a separate dwelling.

(4) The main house has its own front entrance and further entrances via the shared glass conservatory each of which has its own lock. This is compatible with the main house being suitable for use as a separate dwelling. The occupants would enjoy the necessary security.

(5) In terms of necessary security required by a tenant of the annex vis a vis the outside world, the lock on the glass conservatory door and the security lantern outside would provide adequate protection. I expect that every tenant would also require a lock on the door to the annex to secure the tenant’s privacy against the occupant of the main house but I think that alone would not prevent the annex being regarded as suitable for use as a dwelling at completion albeit that a lock would be needed after completion. Mullane

Privacy and interconnecting doors

A single dwelling requires a degree of privacy from other dwellings. It is unusual, but possible, for adjoining dwellings to have interconnecting doors. It is relevant whether the door between the parts can be locked, or is readily capable of being made secure from both sides. The more interconnecting doors that there are between “units” the less likely they could be reasonably considered to be separate single dwellings. The type of door is also important to consider e.g. whether the door has adequate fire proofing and sound proofing to be considered suitable to separate the dwellings. SDLTM00425

Lockable doors – “weighs heavily” [90] and “fundamental issue” [93] : Wilkinson 27. This issue must be determined by considering all the facts which I have outlined at [8] above. I comment on those facts as follows:

(2) The glass conservatory is operating as the dividing line between the main house and the annex. It provides an effective geographic separation of the two parts.

94. The factors indicating that Glenmore is one dwelling not two are as follows.

95. .......

96. The occupants of the main house could not deny entry to the occupants of the annexe. The door between the annexe and the reception hall could not be locked on the main house side, compromising the privacy and security of the occupants of the main house. Mobey

Control of Utilities

A single dwelling should be able to control all or most of the utility services supplied to it. Where a property has a physical configuration which suggests it might be considered two dwellings (“main property” and “annex”) but very few or no utilities can be controlled by the annex-dwellers without needing to enter another dwelling to do so, it is likely that the “annex” should not be considered a single dwelling in its own right. SDLTM00430

“…we have not put a great deal of weight on the evidence that the annex had no separate utility meters or council tax status – this points in the same direction as our conclusion, but we did not place great weight on these factors. Similarly, we did not place great weight on the evidence of a separate postal address for the annex (we acknowledge that the sending of post to the annex was supportive of its “single” status, but do not consider this a very significant factor).” [69] First Tier Tribunal Fiander

Electricity

Electricity Dwellings should have an electricity supply which can be switched on and off from its own consumer unit, within the dwelling or a communal area. SDLTM00430

56. The Tribunal considers that for the annex to be considered a separate unit there would need to be separate meters for both water and electricity. The Appellant would not be pleased if a tenant decided to leave the taps running all night and the electric radiator running 24 hours a day all year round. First Tier Tribunal Dreyfus

Cold Water

Dwellings require a supply of water fit for human consumption/use. The water supply should be able to be turned off from its own stop tap, accessible from within the dwelling or in a communal area. SDLTM00430

Heating

Dwellings will normally have their own independent system(s) for heating, although supplies may occasionally be shared, perhaps by way of a renewable energy scheme. A dwelling would be expected to be able to manage and turn their own heating system on or off (for example whilst works are done) without having to go through another dwelling. SDLTM00430

“…the fact that the hot water control and part of the control for the central heating is located in the Utility Room with no separate control for the Main Property. Realistically arrangements would have to be put in place to allow the Main Property access to those controls and to agree the settings to be applied to the hot water and heating, or to agree that the occupier of the Disputed Area controlled those settings. No such arrangements were in place at the time of the purchase of the Property and the feasibility of the occupiers of the Main Property being satisfied to proceed on any such basis must be in very real doubt if the Disputed Area was occupied by people with no family connections or other bonds. I am satisfied that the phrase use as a “single dwelling” implies that the property in question should be capable of being occupied by independent third parties.” [81] Wilkinson

Gas

Where a dwelling has a gas supply, they should be able to isolate it from within their property or from a shared area. SDLTM00430

Legal Constraints

The property may be subject to legal conditions, including planning restrictions and restrictive covenants, whether public or private law, which inhibit use as a separate dwelling. These conditions will be a factor in considering suitability of use as a dwelling, although where these conditions are not being respected for any reason, actual use will prove more helpful than theoretical use.

We placed no weight on the evidence regarding the “restrictive covenant” in the land registry, which was unclear in itself and in its implications for the issues at hand.” [69] First Tier Tribunal Fiander

Council Tax

Where a property has been assessed for council tax purpose as comprising more than one dwelling, this is an indicator that for SDLT purposes there also may be more than one dwelling. However, the definition of dwelling for council tax purposes is different from that of Stamp Duty Land Tax, and hence this factor will not be a strong indicator on its own. SDLTM00430

The lack of a separate postal address or Council Tax assessment has little impact. [83] Wilkinson “…we have not put a great deal of weight on the evidence that the annex had no separate utility meters or council tax status – this points in the same direction as our conclusion, but we did not place great weight on these factors. Similarly, we did not place great weight on the evidence of a separate postal address for the annex (we acknowledge that the sending of post to the annex was supportive of its “single” status, but do not consider this a very significant factor).”

[69] First Tier Tribunal Fiander (8) That there is only one council tax bill would not prevent the annex from being regarded as being suitable for use as a dwelling at completion. If the annex had already been in use as a separate dwelling before completion, separate council tax registration at completion might be required to qualify for MDR. However, in this case the claim for MDR is on the basis that the property is suitable for use as a dwelling, and that implies that the separate council tax registration is not required at completion and can be obtained as that must be a mere formality. Mullane

Marketing Materials

Estate agents marketing material is a useful tool to assist in consideration of how many dwellings a property might comprise. However, an estate agents’ main objective is in selling the property, not in providing legislatively accurate definitions of dwellings, so this information is not determinative. SDLTM00430

102. The estate agent’s particulars presented Glenmore as a single property with a lower ground floor which comprised a swimming pool, snug, two guest bedrooms and an integral garage.

103. Not all of these factors have equal weight. The most important factors seem to me to be the lack of privacy and security for the main house and the lack of food preparation facilities in the annexe. I also consider the description of the building for which planning permission was granted and the way in which the advertising materials presented the property to be important. Both strongly suggest that Glenmore was a single dwelling and the whole of Glenmore was certainly suitable for use as a single dwelling. Mobey

[62] Due to the short, open corridor connecting them, the main house and annex were simply too closely physically connected for either to be suitable for use as a “single” dwelling. Rather – and this, indeed, is how the property was marketed, on the evidence of the “rightmove” materials – the property was eminently suitable for use as one joined dwelling. First Tier Tribunal Fiander

Seperate Posts and Bills

Individual letter boxes, utility bills and phone bills will all provide some evidence of separate dwellings, but a lack of them will not be a deciding factor to determine that there aren’t separate single dwellings. SDLTM00430

The lack of a separate postal address or Council Tax assessment has little impact

[83] Wilkinson "…we have not put a great deal of weight on the evidence that the annex had no separate utility meters or council tax status – this points in the same direction as our conclusion, but we did not place great weight on these factors. Similarly, we did not place great weight on the evidence of a separate postal address for the annex (we acknowledge that the sending of post to the annex was supportive of its “single” status, but do not consider this a very significant factor).” [69] First Tier Tribunal Fiander

(9) That there is a single utility bill would not be an absolute barrier to the letting of the accommodation to a tenant. Given Mrs Mullane has experience of consumption of water, gas and electricity I infer she will be able to identify the consumption by a tenant of the annex and it is not uncommon for the utility bills to be included in the rent. I expect that the lack of separate meters would be a barrier to sell the annex to a purchaser. But given the objective of the legislation is to increase the number of properties available to rent that would not be an impediment to claim MDR. Mullane

Suitability for Airbnb use

(21) Taking air bnb guests would not be sufficient to demonstrate the purpose of the legislation was met as in my experience such guests expect breakfast to be provided and do not expect to cook breakfast themselves. Mullane

Airbnb usage 54. In other decided MDR appeal cases, the argument has been advanced on the premise that if the purported second dwelling is suitable for use by Airbnb users, then it meets the suitability test for use as a dwelling. It is for this reason that I have considered the merits of such premise by deliberating over the purposive construction of the term ‘dwelling’ in the SDLT context.

55. I do not doubt that the Annexe in question has been found to be suitable accommodation by Airbnb users. However, the relevant comparator of suitability for Airbnb usage is hotel accommodation, which falls to be categorised as non-residential property.

The commonality between hotel and Airbnb is the temporary nature of the accommodation in terms of days, or a week or two at a time, rather than months. In contrast, a place suitable for use as a dwelling is a place where ‘one lives, regarding and treating it as home’. Whilst a place suitable for use as a dwelling is undoubtedly suitable for Airbnb usage, the converse is not self-evident, as illustrated by the factual matrix in the present case. Dower

[It may be asked whether these judicial remarks in Mullane and Dower reflect the experience of most users of Airbnb]

Frequently Asked Questions

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