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What is the Stamp Duty Holiday Extension?

stamp-duty-holiday-image
Robert Bester, Consumer Finance Expert

26th July 2021

1 minute read

Following the Budget 2021 announcements from chancellor Rishi Sunak, we’ve got all the latest developments on the Stamp Duty Holiday and how long it has been extended for.

For those looking at buying a house in 2021, this could mean a big saving on a potential new property. You can find out more about how you can apply, how long the extension lasts for and what it means for first time buyers.

What is the Stamp Duty Holiday Extension?

Buying a house can involve a lot of extra fees and payments, the largest of which is usually Stamp Duty Land Tax or SDLT. Whereas first time buyers already had exemption up to a certain amount, those moving house or looking to buy a second home would have to pay SDLT

To help out buyers during the COVID-19 pandemic, the chancellor, Rishi Sunak, suspended the payment of Stamp Duty on properties worth up to £500,000 for an extended period during 2020. This meant that it would be much cheaper for those wanting to purchase a house to do so during this period.

During the 2021 Budget, the chancellor made a further extension to this regulation, ensuring the scheme could be continued. In part this was due to a backlog of house purchases meaning that many buyers would miss out on the Stamp Duty Holiday as their purchase would not complete in time. It was estimated by Rightmove that an additional 160,000 people would benefit from this extension.

How long does the Stamp Duty Holiday Extension last?

The extension to the Stamp Duty Holiday will now last until the 30th June 2021. This would ensure that those looking to buy a house could benefit from this saving, especially on houses worth up to £500,000:

House value

Temporary Stamp Duty Rate

Up to £500,000

0%

£500,000 - £925,000

5%

£925,001 - £1,500,000

10%

£1,500,000+

12%

 

In addition, the chancellor announced that the scheme would continue until 30th September 2021 but the rates will change slightly so that house buyers can still avoid SDLT on properties worth up to £250,000:

House value

Temporary Stamp Duty Rate

Up to £250,000

0%

£250,000 - £925,000

5%

£925,001 - £1,500,000

10%

£1,500,000+

12%

 

This staggered extension means that many more buyers in the UK will be able to save money and in addition, sellers should be able to have an advantage when pushing through their house sale.

What happens after the extension has finished?

The Stamp Duty Land Tax rate will return to pre-COVID levels of 0% on properties up to £125,000 on 1st October 2021. The rate for first time buyers, which is 0% on properties up to £500,000 will be reapplied on 1st July 2021 following the staggered change in stamp duty rates.

For more information on Stamp Duty, head over to our article here. If you would want to search for mortgage offers instead, you can start your journey with moneymatcher using the link below.