Stamp Duty Holiday Officially Ends - Here's What You'll Pay Now

The stamp duty holiday tapering period is now over, meaning that from 1 October the tax will return to its £125,000 level for homebuyers in England and Northern Ireland.

The three-month tapering period, which ran from 1 July-30 September, meant homeowners would only pay stamp duty on properties costing £250,000 or more. This afforded homebuyers with an extra three months to complete their deals. 

As stamp duty rates in England and Northern Ireland change, here's what you need to know if you're still finalising your purchase on time. 

How Much is Stamp Duty?

The amount of stamp duty you pay depends on several factors, including:

• Purchase price
• Whether the property will be your main residence 
• When the purchase is made
• Whether you're a first-time buyer

Are you completing a sale?

Stamp duty holiday exemption has returned to its original level of £125,000 in England and Northern Ireland. This means that deals which were not completed by 30 September will result in homeowners paying stamp duty on properties costing £125,000 or more. 

The rates differ slightly in Scotland (£145,000) and in Wales (£180,000).

First-time buyers

From 1 October, first-time buyers in England and Northern Ireland will pay no stamp duty on properties worth up to £300,000, and no stamp duty on the first £300,000 of properties costing up to £500,000 - a 5% rate will be paid on the remaining amount, up to £200,000. 

In Wales, first-time buyers will pay no land transaction tax on the first £180,000 of a property. And in Scotland, first-time buyers will pay no land and buildings transaction tax on the first £175,000 of a property.

You can use the Stamp Duty Land Tax (SDLT) calculator to see how much stamp duty will be for a particular purchase.

What was the Stamp Duty Holiday?

The stamp duty holiday, introduced in July 2020, was a tax break which exempted the first £500,000 of all property sales from stamp duty.  

It delivered a shot in the arm to the housing market in 2020, following months of lockdown which essentially led to a housing market freeze. It was also a major factor in house prices reaching record highs this year.  

The holiday was also praised for its impact on those considering renovating a house, and those in the midst of buying or considering a move in the coming months, who can reinvest the savings into their project. 

Homebuyers were able save a maximum of £15,000 through the tax break, and Rightmove estimates that one million households benefitted from a stamp duty saving, a total of £6.1 billion.

But the clamour put the housing sector under pressure. The stamp duty holiday extension in March afforded homebuyers with an extra three months to complete their deals, and was credited with buyer demand hitting twice the normal levels in March, according to reallymoving.

What followed was months of frantic deal-sealing with solicitors reportedly working consistent late nights and weekends to help buyers complete sales. Zoopla estimated in June that around 50,000 sales would have failed to complete in time for 30 June. 

Chancellor Rishi Sunak therefore confirmed a tapering period to help homeowners complete sales on properties over £250,000 or more.