What will happen when the Stamp Duty Holiday ends on June 30 2021?
Caz Blake-Symes • May 11, 2021
Residential property rates
A buyer will usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price when buying a residential property, for example a house or flat. SDLT only applies to properties over a certain value.
The amount that is paid depends on:
- when the property was bought
- how much the buyer paid for it
As a rule a buyer must send an SDLT return if you pay morea than £40,000 for a property - even if there’s no SDLT due. There are some exemptions.
Rates from 8 July 2020 to 30 June 2021
- Up to £500,000 Zero
- The next £425,000 (the portion from £500,001 to £925,000) 5%
- The next £575,000 (the portion from £925,001 to £1.5 million) 10%
- The remaining amount (the portion above £1.5 million) 12%
Example
In March 2021 you buy a house for £625,000. The SDLT you owe will be calculated as follows:
- 0% on the first £500,000 = £0
- 5% on the remaining £125,000 = £6,250
- total SDLT = £6,250
Rates from 1 July 2021 to 30 September 2021
- Up to £250,000 Zero
- The next £675,000 (the portion from £250,001 to £925,000) 5%
- The next £575,000 (the portion from £925,001 to £1.5 million) 10%
- The remaining amount (the portion above £1.5 million) 12%
Example
In August 2021 you buy a house for £275,000. The SDLT you owe will be calculated as follows:
- 0% on the first £250,000 = £0
- 5% on the remaining £25,000 = £1,250
- total SDLT = £1,250
Rates from 1 October 2021
These rates also apply if you bought a property before 8 July 2020.
- Up to £125,000 Zero
- The next £125,000 (the portion from £125,001 to £250,000) 2%
- The next £675,000 (the portion from £250,001 to £925,000) 5%
- The next £575,000 (the portion from £925,001 to £1.5 million) 10%
- The remaining amount (the portion above £1.5 million) 12%
Example
In October 2021
you buy a house for £295,000. The SDLT you owe will be calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £45,000 = £2,250
- total SDLT = £4,750
If you are buying your first home
A First-time Buyer can claim a discount (relief) if you buy your first home before 8 July 2020 or from 1 July 2021.
This means you’ll pay:
- no SDLT up to £300,000
- 5% SDLT on the portion from £300,001 to £500,000
You are eligible if you and anyone else you’re buying with are first-time buyers.
If the price is over £500,000, you follow the rules for people who have bought a home before.
New leasehold sales and transfers
When buying a new residential leasehold property you pay SDLT on the purchase price of the lease (the ‘lease premium’) using the rates above. If the total rent over the life of the lease (known as the ‘net present value’) is more than the SDLT threshold), the buyer will pay SDLT at 1% on the portion of net present value over:
- £500,000 for purchases from 8 July 2020 to 30 June 2021
- £250,000 for purchases from 1 July 2021 to 30 September 2021
- £125,000 for purchases from 1 October 2021
This does not apply to existing (‘assigned’) leases.
For more information about new leases, please visit www.gov.uk/guidance/stamp-duty-land-tax-leasehold-purchases#new-leases
The buyer will usually have to pay 3% on top of SDLT rates if buying a new residential property means you’ll own more than one.
Rates for non-UK residents
Due to the possible complexities o this situation please take legal advice at the earliest opportunity.
We would always recommend that if you have any specific queries , please discuss them with your Solicitor/Conveyancer at the earliest opportunity.
If you have any queries whatsoever, please contact your Adviser or one of our experienced Admin team who will be delighted to help you.
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Adapted from Zoopla’s April 2025 Housing report I mage: The analysis uses average house prices from the house price index and for first-time buyers to assess mortgage payments at different mortgage rates applied to a 30- year mortgage, at different loan-to-values. One emerging trend that we expect to positively support market activity in the coming months is a relaxation in how lenders assess the affordability of new mortgages. While buyers focus on the mortgage rate they will pay, lenders also check whether the borrower can afford a 'stressed mortgage rate' at a higher level than the borrower will pay. While the average 5-year fixed rate mortgage is around 4.5% today, many lenders are currently 'stress testing' affordability at 8-9%. This makes it harder to secure a mortgage without a large deposit. If average mortgage stress rates were to return to pre-2022 levels of 6.5% to 7%, this would deliver a 15-20% boost to buying power. An average first-time buyer with mortgage repayments of £1,020pcm at a 4.5% mortgage rate would typically have to prove they could afford monthly repayments of £1,550pcm at an 8.5% stress rate. If the stress testing is relaxed to 6.5%, repayments would fall to £1,275pcm, boosting buying power. It's a similar pattern for the average homeowner, while the actual impact will vary by lender and type of borrower. This change would consequently supporting demand and sales volumes, helping to clear the stock of homes for sale, rather than boosting house prices. Other existing rules and regulations that remain in place will continue to impact the availability of mortgage finance. Comment from Phil Clark “This is potentially very exciting news and will give borrowers a greater choice of products if these rules are relaxed. Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about the Mortgage and Protection products we offer, please visit www.bristolmortgagesonline.com Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
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There have been some important changes to the legislation regarding Stamp Duty Land Tax with effect from 1 April 2025.
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Adapted from BBC Article by Kevin Peachey, Cost of living correspondent 13 February 2025 Two major lenders launched mortgage deals on Thursday with interest rates of less than 4%, as competition picks up in the sector. The prospect of further cuts in the base rate by the Bank of England has given mortgage providers confidence to reduce their own rates. But the attention-grabbing sub-4% deals by Santander and Barclays will not be available to all borrowers, particularly first-time buyers, and may come with a hefty fee. The return of such deals might prompt other lenders to follow suit after a period of tepid competition. Nationwide, the UK's biggest building society, has said it will reduce some of its rates on Friday. Mortgage deals with interest rates below 4% have not been seen since November. Across the whole market the average rate on a two-year fixed deal is 5.48%. The typical rate on five-year deals is 5.29%, according to latest figures from Moneyfacts. Time to decide Some tracker and variable rate mortgages move fairly closely in line with the Bank's base rate, which was cut to 4.5% a week ago. However, more than eight in 10 mortgage customers have fixed-rate deals. The interest rate on this kind of mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. About 800,000 fixed-rate mortgages, currently with an interest rate of 3% or below, are expected to expire every year, on average, until the end of 2027. That means a higher monthly bill for many homeowners on their next renewal, but there are signs that the rate they could pay is on its way down. Bank of England governor Andrew Bailey said the interest-rate setting committee expected to be able to cut rates further "but we will have to judge meeting by meeting, how far and how fast". This will affect savers who are seeing lower returns, but could bring better news for borrowers. The Bank's next rates decision is on 20 March. Message from Phil Clark “Regardless of whether you are a First-time Buyer, Looking to move, remortgage or invest in property, there are a huge range of competitive mortgage deals on the market. I will be delighted to discuss your specific requirements and offer you the most suitable deal!” Please call Phil on 0117 3251511 or email info@swmortgages.com For more information about Mortgage and Protection please visit www.bristolmortgagesonline.com