# Example 37: Purchase of 5 dwellings

This worked example is for illustrative purposes only.

## Example 37:

OM Developments, a sole trader property investment business, purchases 5 dwellings in one transaction for £1m. The ADS will apply to the purchase but OM Developments can claim Multiple Dwellings Relief. The LBTT due in relation to a dwelling is calculated using the average consideration, £200,000. Applying residential rates means tax payable is £1,100.

As no relief is available, the calculation of DT takes account of the ADS, meaning 4% of £200,000, or £8,000 must be added to DT for each dwelling, meaning DT is £9,100. Applying the formula ∑DT gives £45,500.

This is the LBTT payable unless this is less than the minimum prescribed amount. The minimum prescribed amount is 25% of the LBTT that would be payable absent of the relief. Applying residential rates to the considration of £1 million gives £78,350. Adding the 4% ADS (i.e. £40,000) to this gives £118,350. 25% of this is £29,587 and therefore the LBTT payable is £45,500.