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Stamp duty: when does the holiday end?

May 17, 2021

Are you one of the many home movers who think the stamp duty holiday ends on the 30th June 2021? A reduced rate of property tax actually runs right through until the end of September this year but there are some changes to note.

Are you one of the many home movers who think the stamp duty holiday ends on the 30th June 2021? A reduced rate of property tax actually runs right through until the end of September this year but there are some changes to note. Home buyers will still pay less when they complete on a property purchase, although the discount will be reduced.

If you are thinking of moving home, now is a good time before this window of opportunity closes. Here’s a summary of all the details and deadlines:-

Stamp duty rates until 31st June 2021   

The Government introduced temporary stamp duty thresholds during the pandemic to keep buying and selling activity fluid. The initiative applies to both owner occupiers and property investors, with cash savings of up to £15,000 per transaction.

As per many Government schemes, there are terms and conditions that, in this case, apply until 30th September 2021.  The current stamp duty threshold for residential properties is £500,000. There is zero stamp duty to pay on the first £500,000 of a property purchase, although tax is still due on the portion over £500,000. 

Rather than the stamp duty holiday coming to an abrupt end in June, the Chancellor announced a tapering of the initiative, which effectively softens the blow for home movers. The stamp duty holiday continues after 30th June but in a reduced capacity.

Property purchases from 1st July 2021 to 30th September 2021

Instead of the first £500,000 of a property purchase being stamp duty free, this figure will be revised down to £250,000 from the 1st July 2021. This new level of discount will run until 30th September 2021.

Property purchases from 1st October 2021

Unless the Government intervenes and extends the deadlines again, the stamp duty thresholds will revert to their pre-Covid levels as of the 1st October 2021. These will be:-

The Stamp Duty Land Tax (SDLT) thresholds will be:

Property purchase price = £0-£125k

Owner-occupier stamp duty rate 0%

Buy-to-let & second home buyer rate 3%

Property purchase price = £125,001-£250,000

  • Owner-occupier stamp duty rate 2%
  • Buy-to-let & second home buyer rate 5%

Property purchase price = £250,001-£925,000

  • Owner-occupier stamp duty rate 5%
  • Buy-to-let & second home buyer rate 8%

Property purchase price = £925,001-£1.5m

  • Owner-occupier stamp duty rate 10%
  • Buy-to-let & second home buyer rate 13%

Property purchase price = £1.5m+

  • Owner-occupier stamp duty rate 12%
  • Buy-to-let & second home buyer rate 15%

Special rates for first-time buyers

The Government is keen to encourage first-time buyers onto the property ladder, so it is making a stamp duty exemption for property novices. From 1st July 2021, first-timer buyers pay less stamp duty or potentially even no tax if both the following apply:

  • all those involved in buying a property are first-time buyers
  • the purchase price is £500,000 or less

This discount is being applied retrospectively, available to those who bought their first home before 8th July 2020.

Please contact us if you need help with working out what your stamp duty bill might be if you decide to buy this year. 

 

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