Changes to the Stamp Duty Holiday

The stamp duty holiday threshold will start to taper off from June 30th 2021.

The tax has been suspended on the first £500,000 of all property sales in England and Northern Ireland since July 2020.

After being introduced last summer, the tax break was due to end on 31 March 2021, but the Chancellor announced in the Budget on the 3rd March that it was now due to end on 30 June 2021.

After this date, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty is then scheduled to return on all sales greater than £125,000.

The move was aimed at helping buyers who might have taken a financial hit because of Covid. It could save them as much as £15,000 if they were buying a property of £500,000 or more.

The government says the scheme will allow more people to become homeowners.

This scheme is helping lenders offer 95% mortgages to further stimulate the Housing Market post-Covid.

The government’s annual take from stamp duty is about £12bn, according to the latest figures released by HM Revenue and Customs.

That’s roughly equivalent to 2% of the Treasury’s total tax take.

If the property purchased is your main home – and the sale is completed before 30 June – you won’t pay any stamp duty if it costs £500,000 or less.

Currently the next portion of the property’s price (£500,001 to £925,000) will be taxed at 5%, and the £575,000 after that (£925,001 to £1.5m) at 10%.

The remaining amount (over £1.5m) currently will be taxed at 12%.

Before the announcement in March this year, stamp duty in England and Northern Ireland was paid on property sold for £125,000 or more. First-time buyers did not pay any stamp duty up to £300,000.

Landlords and second-home buyers are also eligible for the tax cut, but will still have to pay the additional 3% of stamp duty they were charged under the previous rules.