The temporary Stamp Duty Land Tax (SDLT) rates in England come to an end on 30 June 2021 and begin to taper off before we return to the usual rules on 1 October 2021. So here’s a quick recap for you as taxes and tax bands can be confusing… 

The government introduced a tax break on Stamp Duty which is usually paid on all residential property purchases over £125,000 back in July 2020. They increased the limit to £500,000 which has contributed to a bit of boom in house purchases and has seen prices increase across the country – 7.1% over the past year according to Nationwide. The increase was set to end on 31 March 2021 but it was extended to 30 June 2021. 

So what happens from 1 July 2021? 

Essentially, the Stamp Duty holiday is winding down over the coming months before returning to the usual £125,000 limit on 1 October 2021. After this date, until the end of September, there is a staggered return to previous stamp duty rates. So from 1 July to 30 September, the following rates apply: 

● £0 – £250,000 = 0% 

● £250,001 – £925,000 = 5% 

● £925,001 – £1.5 million = 10% 

● Over £1.5 million = 12% 

From 1 October 2021, rates are due to return to normal: 

● £0 – £125,000 = 0% 

● £125,001 – £250,000 = 2% 

● £250,001 – £925,000 = 5% 

● £925,001 – £1,500,000 = 10% 

● £1,500,000+ = 12% 

Put simply, the allowance goes down from £500,000 to £250,000. It is worth remembering that you won’t pay Stamp Duty Land Tax on the first £250,000 of the purchase price so there is still a 3% saving to be made on purchases up to £500,000.

Here’s a handy Stamp Duty Land Tax (SDLT) calculator to find out how much you would pay if you are considering buying. 

What about first time buyers? 

Before the Stamp Duty holiday, first time buyers didn’t need to pay SDLT on the first £500,00 anyway. From 1 July 2021 the special rules and rates for first time buyers still apply, including first time buyers purchasing property through a shared ownership scheme. 

What about landlords and second-time buyers? 

You can also make use of the temporary tax cut. That said, you’ll still need to pay the extra 3% of stamp duty you were charged under the previous rules. 

Looking at the changes, Ross Bryant, Principal at Sirius Financial, explains: “There’s no doubt that the Stamp Duty holiday has led to a big uplift in activity in the residential property market. Our message is to talk to us now to understand your options and make decisions based on considered planning. There are so many factors involved from weighing up potential SDLT to thinking about rising house prices and understanding that transactions are taking longer than normal to complete. So it makes sense to find out if the numbers and timescales work for you and your specific circumstances.”