# Example 37: Purchase of 5 dwellings

## Example 37: Purchase of 5 dwellings

### 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 3% of £200,000, or £6,000 must be added to DT for each dwelling, meaning DT is £7,100. Applying the formula ∑DT gives £35,500.

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 consideration of £1 million gives £78,350. Adding the 3% ADS to this gives £108,350. 25% of this is £27,088 and therefore the LBTT payable is £35,500.