What Happens Now the Stamp Duty Holiday Has Ended?
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What Happens Now the Stamp Duty Holiday Has Ended?

The stamp duty holiday ended on the 30th June 2021. However, it is not the end of the government’s scheme to encourage the buying and selling of property throughout the UK. Before the current rates came to an end, buyers could benefit from paying zero tax on the first £500,000 of a property purchase across England and Northern Ireland.

From the 1st July 2021 to 30th September 2021 the stamp duty holiday will be tapered. This means you won’t have to pay any stamp duty when buying a new home up to £250,000. This applies to all residential purchases, regardless of whether you have bought a house before.

However, experts are concerned that the stamp duty extension is delaying financial recovery for the country. On average, stamp duty brings in £12 billion per year into the Treasury – that’s a significant sum that would help make a dent in the coronavirus bill. Albeit a small help, with the expected final amount to be around £500 billion when April 2022 arrives.

Stamp duty rates between 1st July 2021 and 30th September 2021

During this transitional period, no tax will be applied on the first £250,000 when purchasing a residential period. You can use the government’s stamp duty calculator to get an exact figure.

Does this extension apply to second homes and buy-to-let properties?

The stamp duty tapering period applies to the purchase of all residential property. However, the stamp duty surcharge of 3% that is applied to second homes as standard will need to be paid.

Therefore, if a property were purchased for £200,000 before 30th September nothing would be paid in stamp duty. However, the 3% would still need paying, meaning the buyer would have to part with £6,000.

How much stamp duty will buyers need to pay as of 1st October 2021?

When September comes to an end so will the tapering extension. Stamp duty will return to pre-pandemic levels as outlined below:

  • Up to £125,000, stamp duty is zero
  • £125,001 to £250,000, stamp duty is 2%
  • £250,001 to £925,000, stamp duty is 5%
  • £925,001 to £1.5 million, stamp duty is 10%
  • Above £1.5 million, stamp duty is 12%

The charge is staggered, so on a home worth £500,000 the first £125,000 is stamp duty free, the next £125,000 is taxed at 2% and the final £250,000 is taxed at 5%. This would mean £15,000 would have to be paid in stamp duty.

How does the stamp duty extension affect first time buyers?

From 1st July 2021 stamp duty rates for first time buyers return to normal. There is no transition period for those buying a property for the first time.

First time buyers paying £300,000 or less will not have to pay a penny in stamp duty. Any amount over £300,00 (but less than £500,000) will be taxed at 5%. Those purchasing a house for the first time with a value over £500,000 will not be entitled to any stamp duty relief and will pay tax at the normal rate.

When do you pay stamp duty?

Stamp duty isn’t factored into the money you exchange when you complete on a property. It is treated separately and will need to be paid 14 days after you have the keys to your new home. Usually, your solicitor will file your stamp duty return on your behalf on the day of completion. However, you can file a return and pay the tax yourself online or via paper form.

Is now a good time to buy a house?

With the stamp duty extension set in stone until 30th September now is an ideal time to benefit from the tax relief, especially if buying a property under £250,000. With the country returning to a level of normality you can now view properties in person and removals companies can be utilised (with the correct safety measures in place).

If you want to move house before the stamp duty extension ends in September you can find a house for sale near you easily using our online property portal. Simply enter a postcode, town, or county you’d like to live in and check out the variety of homes we have for sale. You can book a viewing online easily.

Equally, if you’d like to sell your house fast, our team of experts are ready to make this a reality. Simply book a free house valuation to get the ball rolling. Got a question or are struggling with booking? Call us on 0800 566 8490 now.  

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