Since the first stamp duty holiday was announced, the property market has thrived and is set to continue until the end of the year, after the recent announcement by Chancellor Rishi Sunak.

With the pent-up demand from buyers who want to move home, the new 95% Loan-To-Value (LTV) mortgage and the new Help-To-Buy Scheme, the Chancellor has decided to extend the stamp duty holiday until the end of June, whereafter it will taper off for a further three months.

The extension means that buyers will not have to pay stamp duty on the first £500,000, providing they complete before June 30th. 

From the July 1st until September 30th, stamp duty will not be charged on the first £250,000, providing completion is done before September 30th. 

On October 1st, the nil rate band will fall back to £125,00.

The stamp duty holiday extension has been welcomed by many buyers and industry leaders, who have been pushing for this extension since the start of the year. 

Many were uncertain if they could complete on time if the previous delaine still presided, have had a sigh of relief after the Chancellor's announcement. 

The holiday extension means nine out of 10 people buying a property will not have to pay stamp duty, saving them an average of £4,500 each and a maximum of £15,000 for those purchasing a home costing £500,000.

Many people looking to benefit from this once in a lifetime tax break after re-evaluating their living situation due to the several national lockdowns and movement restrictions since the pandemic began, has meant that existing homeowners have overtaken first-time buyers who have been dominating the property market prior to the first national lockdown. 

Property transactions have also taken longer than usual due to the spike in property sales currently taking place. It's estimated that around 70,000 people were close to missing the March 31st deadline if this was still the case. 

Once the stamp duty holiday ends on June 30th, there will be an interim period until September 30th when the tax-free threshold will fall to £250,000. 

The tapering move means that nearly half of housing sales in England will be free of stamp duty. Last year, some 46% of all home sales were for properties of up to £250,000.

What are the stamp duty thresholds from October 1st 2021?

The former stamp duty rules will apply from October 1st. This means buyers can be charged between 2% and 12% tax (or up to 17% if they are a foreign investor) on their property purchase, depending on the value of the home they are buying and if they own more than one property.

Stamp duty is calculated as a percentage of the property you are buying. 

It applies to freehold and leasehold properties, whether you're buying outright or with a mortgage.

For existing homeowners, the rates are:


  • 0% up to £125,000
  • 2% on £125,001 - £250,000
  • 5% on £250,001 - £925,000
  • 10% on £925,001 - £1.5m
  • 12% on any value above £1.5m

For example, if you buy a flat for £275,000, the stamp duty you owe would be:

  • 0% on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the final £25,000 = £1,250

Total stamp duty = £3,750

Landlords and second-home owners

For owners of more than one property, a surcharge of 3% on top of the standard stamp duty rates apply.

However, if you sell a home within three years of purchasing a second property, you can apply for a refund of that 3%.

It is also possible under some circumstances to claim multiple dwellings relief.

First-time buyers

First-time buyers are exempt from paying regular stamp duty on properties costing up to £300,000 and pay 5% on the value of a property between £300,000 and £500,000.

A first-time buyer will pay:

· 0% on the first £300,000

· 5% on the remainder up to £500,000

So a first-time buyer purchasing a £275,000 flat would pay no stamp duty.

For a house costing £475,000, a first-time buyer would pay:

· 0% on the first £300,000 = £0

· 5% on the final £175,000 = £8,750

Total stamp duty = £8,750

However, if the purchase price is more than £500,000, first-time buyers cannot claim the relief and must pay the standard rates.

For example, a property purchased at £700,000 would result in a stamp duty bill totalling £25,000 even for a first-time buyer. 

Stamp duty relief was introduced in November 2017 to help people step onto the property ladder.


Whether you are considering buying or selling your property, speak with one of our property professionals today by calling us on 0116 275 888!

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