MS, Cabinet Secretary for
Finance and Welsh Language: Land Transaction Tax (Modification of
Relief for Acquisitions Involving Multiple Dwellings) (Wales)
Regulations 2026 have been laid before the Senedd
today.
Explanatory Memorandum to The
Land Transaction Tax (Modification of Relief for Acquisitions
Involving Multiple Dwellings) (Wales) Regulations 2026
Rheoliadau Treth
Trafodiadau Tir (Addasu Rhyddhad ar gyfer Caffaeliadau sy'n
Ymwneud ag Anheddau Lluosog) (Cymru) 2026 / The Land Transaction
Tax (Modification of Relief for Acquisitions Involving Multiple
Dwellings) (Wales) Regulations 2026
Subject to Senedd approval, the regulations will amend the land
transaction tax (LTT) multiple-dwellings relief (MDR) minimum tax
rule rate.
This applies to LTT paid on the purchase of dwellings in
multiple-dwelling transactions. It most often applies in
mixed-use transactions but can also apply to transactions which
involve residential property only. Mixed-use transactions are
those in which combinations of residential and non-residential
property are purchased together.
The rule stipulates the liability on the purchase of the
dwellings must be at least 1% of the value of those dwellings.
The MDR minimum tax rule provides fairness in transactions in
which tax liability could otherwise be extremely low on the
purchase of some residential property, in comparison to liability
on single-dwelling transactions.
The rate of 1% was set when the rule was introduced into stamp
duty land tax in 2011 and has not changed since. The rule became
part of LTT in 2018. An increase to 3% will improve fairness
while maintaining appropriately different tax treatments for
multiple-dwelling transactions.
In a written statement on 14 October 2025, I announced my
intention to make this change to the minimum tax rule rate, and
to introduce a new MDR equalisation rule, to create per-dwelling
parity between multiple-dwelling and single-dwelling transactions
liable to the higher residential rates.
The new proposed equalisation rule was intended to address the
current situation whereby, when MDR is
claimed on multiple-dwelling transactions subject to the LTT
higher residential rates, the per-dwelling tax liability is lower
than it would be for single-dwelling transactions for the same
dwellings. It would have ensured the per-dwelling liability in
multiple-dwelling transactions with MDR would be at least equal
to that of the equivalent single-dwelling transactions which are
not able to benefit from MDR.
The draft regulations do not include the new equalisation rule.
Amending the legislation for this relatively narrow purpose has
presented significant technical challenges and carries the risk
of introducing new complexity to LTT.
Work on the policy and the rule, and on considering the
legislative changes required, will continue, but the new
equalisation rule will be for a future administration to
consider, as will the wider question of whether MDR should be
retained, further improved or abolished.
