Everything you need to know about the Stamp Duty holiday

In his recent summer statement, Chancellor Rishi Sunak announced a temporary Stamp Duty holiday as part of a plan to stimulate the housing market. This came as welcome news to anyone thinking of buying a house, as purchasers could potentially save thousands of pounds in property taxes.

The housing market has been badly impacted in recent months by the coronavirus outbreak, but the Chancellor is hopeful that this tax break will be enough to encourage buyers and breathe new life into the stagnant market.

If you’re wondering what this all means, here’s your complete guide to what Stamp Duty is, what has changed, and how it will affect you if you’re thinking of buying a property.

Stamp Duty is a tax on the value of a property

Stamp Duty Land Tax is a tax based on the value of a property and applies in England and Northern Ireland.

Normally, the threshold for residential properties is at £125,000. This means if the value of the house you’re buying is below this, you wouldn’t have to pay Stamp Duty.

Purchases above this amount are taxed based on bands:

  • Up to £125,000 – 0%
  • £125 to £250,000 – 2%
  • £250,000 to £925,000 – 5%
  • £925,000 to £1.5 million – 10%
  • Above £1.5 million – 12%

For example, if you were to buy a house for £300,000, you would ordinarily pay £5,000 in Stamp Duty, calculated as:

  • 0% on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the final £50,000 = £2,500
  • This adds up to a final Stamp Duty of £5,000

First-time buyers currently pay no Stamp Duty on properties worth up to £300,000 and a reduced rate on the next £200,000 of value.

Buyers can now save up to £15,000 in tax

From 8th July 2020 to 31st March 2021 inclusive, the threshold for Stamp Duty has been raised to £500,000. This means that if you’re buying a property in England and Northern Ireland worth less than £500,000 to live in yourself, you’ll pay no Stamp Duty.

This also applies to first-time buyers, and so the threshold for people buying their first home has risen from £300,000 to £500,000. This will come as welcome news to first-time buyers in London, where the average house price is £485,794. On average, these buyers will save almost £15,000 in Stamp Duty.

This table shows how much Stamp Duty you could save if you are buying a main residence in England and NI before 31st March 2021. Note that first-time buyers will save a little less as they are already exempt from Stamp Duty up to £300,000.

Property value Ordinary Stamp Duty payable Stamp Duty payable until 31st March 2021 Savings
£100,000 £0 £0 £0
£200,000 £1,500 £0 £1,500
£300,000 £5,000 £0 £5,000
£400,000 £10,000 £0 £10,000
£500,000 £15,000 £0 £15,000
£750,000 £27,500 £12,500 £15,000
£1,000,000 £43,750 £28,750 £15,000
£1,500,000 £93,750 £78,750 £15,000


This change in Stamp Duty will apply to all potential buyers in England and Northern Ireland.

Statistics show that a considerable number of buyers could benefit from this. According to Rightmove, people asking about properties under £500,000 make up 84% of enquiries in England.

Note that if buying an additional property means you’ll own more than one, you’ll still have to pay the 3% Stamp Duty surcharge on top of the regular rate of tax, as seen in the chart below.

Purchase price Stamp Duty rate to 31st March 2021 for first homes


Stamp Duty rate to 31st March 2021 for additional residential properties
Up to £500,000 0% 3%
£500,001- £925,000 5% 8%
£925,001- £1.5 million 10% 13%
£1.5+ million 12% 15%


Since the Chancellor’s announcement, Scotland and Wales have also followed suit by announcing their Stamp Duty holidays. Buyers will not pay any Stamp Duty when buying homes up to £250,000, and these holidays came into place on the 15th July and 27th July, respectively.

Both of these schemes will run until 31st March, the same day as in England and Northern Ireland.

One important difference is that second homes and Buy to Let investors are exempt from the holiday in Wales.

Stamp Duty Holiday has increased mortgage enquiries by 29%

The Chancellor’s plan to rejuvenate the housing market appears to have worked. A report from Experian showed a 29% increase in mortgage enquiries in the two weeks following his announcement of the Stamp Duty holiday.

Experian also said that searches for house purchase mortgages have increased faster than any other type, suggesting that the Chancellor’s decision had the desired effect.

House prices have also begun to rebound as the country exits lockdown. The average price of a house in July was £220,936, up from £216,403 in the previous month.

Get in touch

If you’re thinking of buying a property and taking advantage of the Stamp Duty holiday, we can help. Email enquire@london-money.co.uk or call us at (0207) 808 4120 to find out more.