WHAT IS A STAMP DUTY HOLIDAY?
Updated: Mar 17, 2021
The stamp duty holiday came into effect on 8th July 2020 and is set to end on 30th June 2021. The stamp duty holiday was originally due to end on 31st March 2021.
During the spring Budget on 3rd March 2021, the Chancellor announced a 3 month extension to the stamp duty holiday meaning it will now remain in place until the end of June. From July further stamp duty relief will be available until 30th September 2021.
The Chancellor Rishi Sunak originally announced the introduction of the stamp duty holiday in his summer statement as part of the economic response to the Covid-19 pandemic. The changes to stamp duty are designed to support the housing sector through the crisis.
How does it work?
The initial threshold for anyone buying a property has increased from £125,000 to £500,000 until 30th June 2021. To ensure a smooth transition back to normal rates, the initial stamp duty threshold will reduce to £250,000 from July through to end of September 2021.
Additional property transactions will also benefit from the higher initial threshold with only the lower surcharge of 3% being applied to buy to let and second home purchases up to £500,000 until the end of June and £250,000 from July until September 2021.
The stamp duty holiday applies to house purchases in England and Northern Ireland.
When does the stamp duty holiday end?
The stamp duty holiday is due to end on 30th June 2021 with further stamp duty relief available until October 2021.
From October 2021 onwards the stamp duty rates and thresholds are due to revert back to previous levels.
WHAT ACTUALLY IS STAMP DUTY LAND TAX?
UK Stamp duty was first introduced in 1694 and was levied to pay for the war with France.
UK Stamp Duty Land Tax (SDLT) is a charge on property transactions and came into effect on 1 December 2003. Stamp Duty land tax replaced the old stamp duty system which dated back over 300 years.
Stamp duty taxation is limited to the acquisition of property and land situated in the UK, the boundary being the low water mark of every part of the UK which borders the sea.