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Stamp Duty Holiday feature image of South Devon holiday cottage

Chancellor Rishi Sunak announced a Stamp Duty Holiday extension, in the latest effort to boost the housing market, in the economic response to the wake of the COVID-19 property freeze. This major change to Stamp Duty on all residential property sales in England and Northern Ireland has now been extended until 30th June 2021, followed by a transitional rate from 1st July to 30th September 2021. 

Read further for updated information on Stamp Duty, the extension and whether the Stamp Duty Holiday will impact buying a property as a holiday let business.


What is Stamp Duty?

Stamp Duty or Stamp Duty Land Tax (SDLT) is a cost a buyer must pay when purchasing a residential property or a piece of land in England and Northern Ireland worth more than £125,000. The charge works on a tiered basis and is only applicable after the minimum threshold price is reached, which increases in relation to the value of the property thereafter.

Stamp Duty Land Tax for residential properties

Stamp duty holiday

Stamp Duty Land Tax for non-residential land and properties

Stamp duty holiday

*Stamp Duty guide information from HMRC website prior to changes


What is a Stamp Duty Holiday?

A Stamp Duty Holiday is a change to the threshold at which buyers pay Stamp Duty Land Tax on purchasing a property or land. This change was announced by the UK Government and came into immediate effect on the 8th July 2020 as an economic response to the COVID-19 pandemic.


What are the changes to Stamp Duty?

The changes mean that the threshold at which buyers must start paying Stamp Duty on a property they purchase, increases from £125,000 to up to £500,000 for residential properties. This change to the Stamp Duty means that buyers now only start to pay tax on a residential property above £500,000, whilst the threshold for non-residential properties and land remains at £150,000. It is a measure of the severity of the current situation and is designed to support the housing sector through the crisis.

Stamp Duty Holiday | Rates for residential properties (available until 30th June 2021)

Stamp duty holiday

*Stamp Duty guide information from HMRC website detailing reduced rates available until 30th June 2021

Stamp Duty Land Tax | Transitional rates for residential properties (available from 1st July – 30th September 2021 )

If you purchase a residential property between 1st July 2021 to 30th September 2021, you only start to pay SDLT on the amount that you pay for the property above £250,000.

Stamp duty holiday

*Stamp Duty guide information from HMRC website detailing reduced rates available from 1st July – 30th September 2021.

Are you thinking of buying a holiday home? Use the HMRC Stamp Duty Land Tax calculator to find out how much tax you can expect to pay.


Do the Stamp Duty changes impact buy-to-let properties and second homes?

When you buy any property in addition to your main residence, be it a second home, a holiday home or a buy-to-let, there is an additional Stamp Duty charge known as Higher Rates on Additional Dwellings tax (HRAD). This starts at 3% and then rises in bands, climbing to 15% for the most expensive properties. Those purchasing a buy-to-let or second home will also benefit from the Stamp Duty changes and are eligible for the tax cut, but will still have to pay the extra 3% of HRAD charged under the previous rules.

The 3% higher rate for purchases of additional dwellings applies on top of the temporary reduced rates (listed above), with separate rates listed for the following periods:

  • 8th July 2020 to 30th June 2021
  • 1 July 2021 to 30 September 2021
  • 1st October 2021 onwards

Higher Rates on Additional Dwelling Tax  (available until 30th June 2021)

Stamp duty holiday

For non-UK residents, the rates are increased by 2% with effect from 1st April 2021.

Higher Rates on Additional Dwelling Tax (available from 1st July to 30th September 2021)

Stamp duty holiday

For non-UK residents, the rates are increased by 2% with effect from 1st April 2021.

From 1 October 2021, the Higher Rates on additional Dwelling Tax will then apply on top of the standard rates of SDLT.

Stamp duty holiday

For non-UK residents, the rates are increased by 2% with effect from 1st April 2021.

Use the SDLT calculator to work out how much tax you’ll pay.

*Information from HMRC website (2021)


When does the stamp duty holiday end?

Residential Rates: The Stamp Duty Holiday extension means you now have until 30th June 2021 to complete on the purchase of a property to make the stamp duty saving. Then, from 1st July 2021 to 30th September 2021, the nil rate band will be £250,000. The nil rate band will return to the standard amount of £125,000 on 1st October 2021.

Higher Rates on Additional Dwellings tax (HRAD): The extension means that until 30th June 2021, the higher rates threshold will apply to transfer value up to £500,000. Then from 1st July 2021 to 30th September 2021, the rates will apply to transfer value up to £250,000.


For those considering investing in a property for a holiday let, read our blog ‘are holiday lets a good investment’ to find out whether there could be a lucrative return on investment.

If you would like further advice on buying or letting a holiday home in Devon, call our experienced team or visit our Let Your Cottage page to request a free Owners Guide today.

Click here to request an Owners Guide

* At the time of publishing Coast & Country Cottages has taken all reasonable care to ensure that the information contained in this article is accurate. However, no warranty or representation is given that the information is complete or free from errors or inaccuracies. Generic information is contained within this article and each individual’s tax affairs are different, further advice should be sought from an accountant.