Extension of SDLT ‘holiday’ and other stamp taxes measures

Extension of SDLT ‘holiday’ and other stamp taxes

SDLT ‘holiday’ extended, SDLT exemption for Freeports and an effective date for SDLT and ATED reliefs for certain housing cooperatives.

Neil Whitworth

Stamp Taxes Senior Manager



Also on home.kpmg

At Budget 2021, the Chancellor announced an extension of the current stamp duty land tax (SDLT) ‘holiday’ which had been due to end on 31 March 2021 as well as an SDLT exemption for Freeports. The Government also set the effective date for SDLT and annual tax on enveloped dwellings (ATED) reliefs for certain housing cooperatives.

SDLT holiday extended

The current SDLT 'holiday' under which the nil band for residential properties was increased from £125,000 to £500,000 was due to end on 31 March 2021. It will now be extended to 30 June 2021. Thereafter the nil band will reduce to £250,000 until 1 October 2021 when it will return to £125,000.

This is clearly a welcome stimulus to the residential property market as a whole - the rate of SDLT is reduced for people buying their main home, a buy-to-let or a second home, saving up to £15,000 of SDLT. It also continues to benefit the larger real estate investors who can claim multiple dwellings relief on their purchases of property redress schemes (PRS), purpose-built student accommodation blocks and retirement living developments.

It should be noted however that the non-resident surcharge is still set to come in on 1 April 2021. This will add an extra 2 percent to all the residential bands for buyers who are non-resident individuals or companies or other entities ultimately under overseas control. 

Freeports SDLT exemption

To encourage investment in the new Freeport zones, land purchased for a ‘qualifying use’ in these zones (once specifically designated) will be free of SDLT until 30 September 2026. HMRC will be able to monitor qualifying use for a control period of up to three years and withdraw the relief if the property ceases to be in qualifying use in this period. For more on freeports please see our separate article.

New stamp reliefs for certain housing cooperatives

Last summer HMRC published draft legislation to relieve qualifying housing cooperatives from the 15 percent ‘envelope’ rate of SDLT and the charge to the ATED; each typically applying where the dwelling value is £500,000 or above. Qualifying housing cooperatives are essentially ones that are neither publicly funded nor social housing cooperatives and do not have transferrable share capital.

The ATED relief will take effect retrospectively from 1 April 2020 (so refunds may be claimed by qualifying housing cooperatives). The SDLT relief came into effect from Budget Day i.e. 3 March 2021.

For further information please contact :

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