After the rules on stamp duty were changed in July 2020, the property market enjoyed an unexpected pandemic boom.
Here in the South West, property prices are now 11.4% higher than they were in March 2020 – and much of that growth can be put down to the effect of the stamp duty ‘holiday’.
The ‘holiday’ was extended in March 2021 until the end of September, when the rules on stamp duty will change once again.
Here, we’ll look at what the end of the stamp duty extension means for buyers and outline what you can expect to pay…
What is the stamp duty threshold?
The stamp duty threshold is the portion of a property’s asking price that is free of stamp duty.
The threshold is different for first-time buyers, compared with those who already own a property or have done so in the past.
Under the stamp duty ‘holiday’ rules, buyers were exempt from stamp duty on the first £500,000 of a property’s purchase price – meaning savings of up to £15,000 for some buyers.
When does the stamp duty holiday end?
The ‘holiday’, which started in July 2020, officially comes to an end on September 30, 2021
The stamp duty ‘holiday’ was due to end on March 31, 2021 but was extended until the end of September, with a ‘tapered’ change to the exemption threshold coming in at the end of June.
That meant the exemption threshold dropped from £500,000 to £250,000, although first-time buyers are exempt from tax on the first £300,000 of a property’s purchase price.
Will the stamp duty holiday be extended in 2021?
There are no plans to extend the stamp duty ‘holiday’ again in 2021, with rules on the property tax reverting to what was in place before the pandemic from September 30, 2021.
The stamp duty rules until September 30, 2021
The stamp duty exemption threshold was raised to £500,000 when the ‘holiday’ was first introduced in July 2020.
That meant buyers paid no stamp duty on the first £500,000 of a property’s purchase price.
After the ‘holiday’ was extended in March 2021, the exemption threshold dropped to £250,000 for existing property owners and £300,000 for first-time buyers from June 30.
So, until September 30, 2021, buyers in England and Northern Ireland will pay the following rates of stamp duty:
| Portion of purchase price | Stamp duty rate |
| £0 – £250,000 | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1.5m | 10% |
| £1.5m + | 12% |
First-time buyers, meanwhile, will pay:
| Portion of purchase price | Stamp duty rate |
| £0 – £300,000 | 0% |
| £300,000 – £925,000 | 5% |
| £925,001 – £1.5m | 10% |
| £1.5m + | 12% |
Buyers of second homes or buy-to-let properties must pay an additional 3% surcharge on standard stamp duty rates, meaning they’ll pay:
| Portion of purchase price | Stamp duty rate |
| £0 – £250,000 | 3% |
| £250,001 – £925,000 | 8% |
| £925,001 – £1.5m | 13% |
| £1.5m + | 15% |
What will stamp duty be after September 2021?
After September 30, 2021, stamp duty will revert to its pre-pandemic rules, meaning the exemption threshold drops to £125,000.
First-time buyers, however, will continue to benefit from a £300,000 exemption.
Buyers of second homes, meanwhile, will still pay an additional 3% surcharge:
| Portion of purchase price | Buyer stamp duty rate | Surcharge stamp duty rate |
| £0 – £125,000 | 0% | 3% |
| £125,001 – £250,000 | 2% | 5% |
| £250,001 – £925,000 | 5% | 8% |
| £925,001 – £1.5m | 10% | 13% |
| £1.5m + | 12% | 15% |
How much stamp duty will I pay where I live?
We’ve got some great properties for sale across the South West here at CJ Hole – but what will you pay in stamp duty?
We’ve looked at the average property prices in the areas we cover and worked out how much you’ll pay in stamp duty now and when the ‘holiday’ ends in September 2021…
Stamp duty before September 30, 2021
| Location | Average property price | Buyer stamp duty | First-time buyer stamp duty | Investor / second home stamp duty |
| Bristol | £321,991 | £3,599 | £1,099 | £13,259 |
| Bridgwater | £217,695 | £0 | £0 | £6,530 |
| Broadway | £416,449 | £8,322 | £5,822 | £20,815 |
| Burnham-on-Sea | £236,796 | £0 | £0 | £7,103 |
| Cheltenham | £324,155 | £3,707 | £1,207 | £13,432 |
| Cirencester | £321,656 | £3,582 | £1,082 | £13,232 |
| Hucclecote | £255,720 | £286 | £0 | £7,957 |
| Quedgeley | £217,895 | £0 | £0 | £6,536 |
| Worcester | £258,235 | £411 | £0 | £8,158 |
Stamp duty from October 1, 2021
| Location | Average property price | Buyer stamp duty | First-time buyer stamp duty | Investor / second home stamp duty |
| Bristol | £321,991 | £6,099 | £1,099 | £15,759 |
| Bridgwater | £217,695 | £1,853 | £0 | £8,384 |
| Broadway | £416,449 | £10,822 | £5,822 | £23,315 |
| Burnham-on-Sea | £236,796 | £2,235 | £0 | £9,339 |
| Cheltenham | £324,155 | £6,207 | £1,207 | £15,932 |
| Cirencester | £321,656 | £6,082 | £1,082 | £15,732 |
| Hucclecote | £255,720 | £2,786 | £0 | £10,457 |
| Quedgeley | £217,895 | £1,857 | £0 | £8,394 |
| Worcester | £258,235 | £2,911 | £0 | £10,658 |
