This falls under the scope of Multiple Dwellings relief (MDR).

The concept of Multiple Dwellings Relief (MDR) revolves around the understanding of a “dwelling.” In the context of MDR, a “dwelling” refers to a single self-contained living space, such as a house or a flat, that provides the occupant with the ability to lead a private domestic existence. To qualify for MDR, a dwelling must satisfy specific criteria.

Firstly, it must have its own dedicated bathroom and kitchen area, ensuring that it can function independently as a living space. Additionally, it should possess a separate entrance door, allowing for individual access. Privacy from the main house is another vital aspect, ensuring that the occupants of the separate dwelling have a distinct living environment. In summary, the dwelling should have the capacity to operate as a separate and self-sufficient unit. It is worth noting that while the dwelling may be physically attached to the main house, it must be equipped with a lockable door that effectively separates the two properties.

However, it is important to clarify that MDR does not apply when there are only plans in place to construct an annexe or any additional dwelling. The relief is not intended for situations where the intent is solely focused on future construction. MDR specifically relates to existing dwellings. Nonetheless, if significant progress has been made at the time of purchase towards modifying the living space to meet the requirements of a separate dwelling, it would typically be considered sufficient to qualify for this relief.

By providing clarity on the definition and criteria of a dwelling within the context of MDR, individuals can better understand whether their property purchase containing multiple dwellings qualifies for the stamp duty refund.