Stamp duty holiday ending

July 28, 2021
By Sally Stone

As a result of the slump in the housing market due to the impact of the Covid-19 Pandemic in March 2020, the Government introduced an incentive to boost the market again – the Stamp Duty holiday. This came into effect on 8th July 2020 and was initially set to end 31St March 2021.

The success and uptake on this payment holiday available to first-time and second-time buyers alike lead to the property market see the highest rates of property sales since 2005. House prices are still 10.5% higher this July than in July 2020.

The relief offered in the Stamp Duty holiday bands is being tapered off from the 1st July 2021, after already being extended for 3 months. The new guidelines from July are listed below for first time buyers:

Property value:

  • £0.00-£250,000 = 0 duty
  • £250,001-£925,000 = 5% duty
  • £925,001-£1,500,000 = 10% duty
  • £1,500,000+ = 12% duty
  • The bands are reverting to the previous rates from 1st October 2021:
  • £0.00-£125,000 = 0 duty
  • £125,001-£250,000 = 2% duty
  • £250,001-£925,000 = 10% duty
  • £925,001-£1,500,000 = 10% duty
  • £1,500,000+ = 12% duty

People purchasing properties such as a second home are subject to the additional 3% charge.

Due to the high demand for people wanting to complete their purchases before the end of the final deadline the mortgage rates are also currently very competitive, but this is also met with solicitors having large workloads. There is a feeling of a final push in the market for people to take advantage of the payment holiday before the end of September 2021. It is thought that the market will still be in a good position at this point, and some buyers being able to take advantage of 5 years fixed mortgage terms will lead to a feeling of confidence and security that has been missing for so many over the last 18 months.