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Linked Property Purchases
When you buy multiple properties from the same seller (or someone connected to them) as part of a single deal or series of transactions, HMRC treats these purchases as "linked" for Stamp Duty Land Tax (SDLT) purposes. This matters because linked transactions are taxed based on...
Introduction
When you buy multiple properties from the same seller (or someone connected to them) as part of a single deal or series of transactions, HMRC treats these purchases as "linked" for Stamp Duty Land Tax (SDLT) purposes. This matters because linked transactions are taxed based on their combined value, which often pushes you into higher tax bands and increases the total SDLT you pay compared to unrelated purchases.
What makes property purchases linked?
HMRC treats transactions as linked when all three of these conditions apply:
- There is more than one transaction
- The transactions involve the same buyer and seller (or people connected to either of them)
- The transactions form part of a single arrangement, scheme, or series of transactions
The key point is that there's no time limit. Purchases made months or even years apart can still count as linked if they're part of a connected series of deals.
Who counts as a connected person?
"Connected persons" include your relatives such as your spouse, civil partner, parent, grandparent, brother, or sister. It also extends to their relatives.
For example, if you buy a house and your sister buys the garden from the same seller as part of the same deal, these transactions are linked because you're connected persons buying from the same seller.
When the buyer or seller is a business, connected persons include business partners and their relatives, as well as companies within the same group.
How linked transactions affect your SDLT bill
When transactions are linked, SDLT is calculated on the total value of all linked purchases combined. You then work out the tax rate based on this total, and apportion the tax bill between each property according to its proportion of the total purchase price.
This typically results in a higher SDLT bill because the combined value pushes you into higher tax bands.
Residential or non-residential properties?
If all the linked properties are residential, you apply residential property rates to the total. If any or all properties are non-residential (such as commercial property or land), you apply non-residential rates to all linked transactions.
From 1 April 2016, higher rates of SDLT apply when you purchase additional residential properties. These add an extra 5% on top of standard residential rates and apply when you own more than one residential property.
Single arrangement vs series of transactions
Single arrangement
Some linked transactions happen as part of one single arrangement or scheme, even if documented in separate contracts. For instance, if you buy a house and your brother simultaneously buys an adjoining piece of land from the same seller as part of the same deal, these are linked.
You calculate SDLT on the total purchase price, then divide this tax between the transactions based on each one's share of the total cost.
Series of transactions
Transactions can also link when one sale is followed by related sales over time, provided something connects all the purchases together. There's no time limit on how far apart these transactions can be.
Worked example: buying three houses from the same builder
This example shows how linked transactions work when buying properties as part of a series, using rates in force from 1 April 2025.
You buy a house from a builder for £280,000 as your family home. Later, you purchase a second house from the same builder for £275,000 as an investment, receiving a special price. Still later, you buy a third house from the same builder for £275,000, also as an investment with a special price.
First purchase (£280,000)
As a standalone transaction, SDLT is:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the remaining £30,000 = £1,500
- Total SDLT: £4,000
Second purchase (£275,000)
Now the transactions become linked. The combined value is £555,000 (£280,000 + £275,000).
Because you now own more than one residential property, the higher rates for additional properties apply to the linked calculation (though not retrospectively to your first purchase when you paid it).
Recalculation for property 1:
- Calculate SDLT on £555,000 at standard rates: 0% on £125,000, 2% on the next £125,000, and 5% on the remaining £305,000 = £17,750
- Apportion to property 1: £17,750 × (£280,000 ÷ £555,000) = £8,954
- Less tax already paid: £8,954 - £4,000 = £4,954 additional tax due
Calculation for property 2:
- Calculate SDLT on £555,000 at higher rates for additional properties: 5% on £125,000, 7% on the next £125,000, and 10% on the remaining £305,000 = £45,500
- Apportion to property 2: £45,500 × (£275,000 ÷ £555,000) = £22,545 tax due
At the time of the second purchase, you pay £22,545 for the new property plus £4,954 additional tax for the first property.
Third purchase (£275,000)
The combined value is now £830,000 (£280,000 + £275,000 + £275,000).
Recalculation for property 1:
- Calculate SDLT on £830,000 at standard rates: 0% on £125,000, 2% on the next £125,000, and 5% on the remaining £580,000 = £31,500
- Apportion to property 1: £31,500 × (£280,000 ÷ £830,000) = £10,637
- Less tax already paid (£4,000 + £4,954): £1,683 additional tax due
Recalculation for property 2:
- Calculate SDLT on £830,000 at higher rates: 5% on £125,000, 7% on the next £125,000, and 10% on the remaining £580,000 = £73,000
- Apportion to property 2: £73,000 × (£275,000 ÷ £830,000) = £24,186
- Less tax already paid: £24,186 - £22,545 = £1,641 additional tax due
Calculation for property 3:
- Calculate SDLT on £830,000 at higher rates: £73,000 total
- Apportion to property 3: £73,000 × (£275,000 ÷ £830,000) = £24,186 tax due
When you complete the third purchase, you pay £24,186 for the new property plus £1,683 and £1,641 additional tax for the first and second properties respectively.
Key takeaways
Linked transactions can significantly increase your SDLT bill because:
- Tax is calculated on the combined value, pushing you into higher tax bands
- You may need to pay additional tax on earlier purchases when you complete later linked transactions
- Higher rates for additional properties apply once you own more than one residential property
If you're buying multiple properties from the same developer or seller, consider whether your purchases might be linked and factor the additional SDLT costs into your planning.
Sources
This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.
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