Back in March Rishi Sunak announced an extension of three months to the stamp duty holiday originally announced in July 2020 to encourage the housing market amid the pandemic.
The Stamp Duty holiday means that anyone who purchases a property won’t have to pay tax on the first £500,000 increased from the original amount of £125,000.
For example, if you bought a house for £300,000, you would pay no stamp duty saving you £5,000.
Announcing the extension Mr Sunak said the extended period would allow homebuyers extra time to complete sales.
But there isn’t long left before the holiday comes to an end at the end of June, however, the tax rate won’t jump straight back to normal.
What is stamp duty?
When you buy a residential property or land in England, you are charged a tax known as stamp duty. The tax applies to both freehold and leasehold properties regardless of whether you’re buying outright or through a mortgage.
How it will return
To ‘smooth the transition back to normal’, the nil rate band will be £250,000 – double its standard level – until the end of September with the usual level of £125,000 returning on October 1st.
How much stamp duty do you need to pay?
Until June 30th, 2021:
Up to £500,000 – no stamp duty
£500,001 to £925,000 – 5%
£925,001 to £1.5m – 10%
Above £1.5m – 12%
Between July 1st and September 30, 2021:
Up to £250,000 – no stamp duty
£250,001 to £925,000 – 5%
£925,001 to £1.5m – 10%
Above £1.5m – 12%
Stamp duty rates return to the standard rate from October 1st, 2021:
Up to £125,000 – no stamp duty
From £125,001 to £250,000 – 2%
£250,001 to £925,000 – 5%
£925,001 to £1.5m – 10%
Above £1.5m – 12%
