Stamp Duty 2021 – changes explained

Following changes to Stamp Duty and the extension of the Stamp Duty Holiday over 2020/21, we provide a handy reminder to help you in understanding what the changes might mean to you.

 

Stamp duty – what is it?

A buyer has to pay Stamp Duty Land Tax (SDLT) when buying a property. There’s different percentage levels applied to different price bands (within the purchase price) and different rates if the property isn’t your main one.

Whilst it only applies in England and Northern Ireland, you’ll still need to pay Land and Buildings Transaction Tax in Scotland and Land Transaction Tax in Wales.

 

The stamp duty break – what it means

To help stimulate the property market at the start of the Covid crisis, the Chancellor introduced a stamp duty holiday in July 2020 which meant that, only if you were buying a property over the value of £500,000, did you need to pay stamp duty.

 

The end of the stamp duty holiday

The stamp duty holiday will end on 30 June 2021 (originally it was ending on 31 March 2021) and then:   

• Between 1 July and 30 September 2021, you’ll only have to pay stamp duty if you buy a property above £250,000
• From 1 October, you’ll have to pay stamp duty on properties valued £125,000 and above.

 

Here’s what stamp duty you’ll need to pay in 2021 – and what the old stamp duty calculations were:

 

Before July 7th 2020

£0 to 125,000 = 0%

£125,001 to 250,000 = 2%

£250,001 to 500,000 = 5%

£500,001 to 925,000 = 5%

£925,001 to 1,500,000 = 10%

1,500,001 plus = 12%

8th July 2020 to 30th June 2021

£0 to 125,000 = 0%

£125,001 to 250,000 = 0%

£250,001 to 500,000 = 0%

£500,001 to 925,000 = 5%

£925,001 to 1,500,000 = 10%

1,500,001 plus = 12%

1st July 2021 to 30th September 2021

£0 to 125,000 = 0%

£125,001 to 250,000 = 0%

£250,001 to 500,000 = 5%

£500,001 to 925,000 = 5%

£925,001 to 1,500,000 = 10%

1,500,001 plus = 12%

After 30th September 2021

£0 to 125,000 = 0%

£125,001 to 250,000 = 2%

£250,001 to 500,000 = 5%

£500,001 to 925,000 = 5%

£925,001 to 1,500,000 = 10%

1,500,001 plus = 12%

As an example, when buying a £400,000 property you’d pay:

• Pre 8/7/2020: £10,000 (calculated by £0 - 125k at 0%, £125K - 250k at 2% = £2,500, £250K- 400K at 5% = £7,500)

• Between 8/7/2020 and 30/6/2021: £0 – as no stamp duty is payable on properties of this value.

• Between 1/7/2021 and 30/9/2021: £7,500 (calculated by £0 – 250K at 0% and £250K – 400K at 5% = £7,500)

• After 1/10/2021: £10,000 (calculated by £0 - 125k at 0%, £125K - 250k at 2% = £2,500, £250K- 400K at 5% = £7,500)

 

Stamp Duty is different for first time buyers

Whilst homebuyers will start paying:

• From 1 July 2021 - 5% of the value of the property above £250,001, and
• From 1 October 2021, 2%  of the value above £125,001

First time buyers will pay no stamp duty on properties under the value of £300,000.

For further information why not visit our special Stamp Duty guidance which includes our useful Stamp Duty Calculator.