Stamp duty holiday changes: how you can still make a saving when buying a home

The stamp duty holiday has revitalised the home market, resulting in homebuyers rushing to get deals over the line and house prices rising rapidly.

The tax break, that was introduced last July, enabled people to save up to lb15,000 when buying a home.

It’s now too late to make such a large saving, but buyers in England and Northern Ireland can continue to cut thousands business bills until the end of September.

Here, Which? explains the way the stamp duty holiday is changing from today, while offering advice on how much you could lay aside when buying a house.

How will the stamp duty holiday work?

Last July, the government temporarily introduced higher stamp duty thresholds in an attempt to obtain the property market moving following the first lockdown.

The changes enabled homebuyers in England and Northern Ireland to profit from the lb500,000 tax-free threshold, up from lb125,000 for existing homeowners or lb300,000 for first-time buyers.

This resulted in a house mover purchasing a property for lb500,000 or even more would save lb15,000 around the usual stamp duty bill.

In Wales, the standard threshold of lb180,000 was increased to lb250,000, as well as in Scotland, the brink of lb145,000 (or lb175,000 for first-time buyers) was increased to lb250,000.

What’s changing from today?

Yesterday (30 June) was the final day to create big savings under the stamp duty holiday, but some buyers it's still in a position to take advantage of smaller regulations if they purchase a home within the next couple of months.

In England and Northern Ireland, the temporary lb500,000 tax-free threshold continues to be reduced to lb250,000 from today until 30 September. From 1 October, it will go back to the conventional degree of lb125,000.

The stamp duty holidays in Scotland and Wales have both now come to a detailed, and thresholds have reverted to their original levels.

How much am i going to save basically purchase a home before 30 September?

The tapering from the allowance to lb250,000 means that from today, the maximum saving available when purchasing a home is lb2,500.

The table below shows how much you’ll have to pay in stamp duty when buying a property in England or Northern Ireland prior to the end of September.

Use our stamp duty calculator

If you’re thinking of buying a home and wish to know how much you’ll have to pay in tax, you should use our stamp duty calculator below.

How will the alterations affect first-time buyers?

Now the threshold continues to be lowered to lb250,000, first-time buyers in England and Northern Ireland won’t make any savings on stamp duty.

That’s because individuals buying their first home already take advantage of a higher threshold of lb300,000, that was introduced in 2021.

This allowance means most first-time buyers already don’t pay any stamp duty, unless they’re buying homes in more expensive areas.

Data in the Land Registry shows first-time buyers in England pay an average of lb225,000, well underneath the lb300,000 tax threshold.

How has the stamp duty holiday affected the market?

The stamp duty break has had a major impact on house prices, with Land Registry data showing costs are increasing by nearly 9% year on year.

Sales figures also have spiked. UK sales bottomed out around 40,000 in last year’s lockdown but have topped 100,000 per month each month since last October, led through the stamp duty cut.

Rightmove estimates that 1.3 million buyers have benefited from the holiday across Great Britain, with sellers hiking asking prices by more than lb16,000.

Increased competition and rising prices mean many buyers may have purchased their houses at the top of the marketplace, perhaps paying premiums that outweighed the tax savings.

What will happen to accommodate prices and purchasers?

Now the biggest savings have ended, it’s likely that we’ll begin to see the property market settle down over the next couple of months.

This could result in house price growth slowing down, and some areas perhaps seeing prices stagnate or even fall slightly.

The rush to purchase homes could also cool down, with buyers less wanting to compete for properties and push purchases within the line.

A survey by Rightmove found that 25% of buyers who’ve missed the 30 June deadline will try to renegotiate their cost using the seller, while 13% will appear to buy a less expensive home. Only 4% said they would completely abandon their plans to buy.

Advice on buying a home

If you're looking to purchase this season, we’re here to assist with all the advice you need, whether you're putting money aside for a deposit or will be ready to apply for a mortgage.

As a place to begin, check out our step-by-step help guide to buying a house, which takes yourself on your way from saving a first deposit to exchanging contracts.

To help you to get to grip with how mortgages work, we've got plenty of advice on the different types of deal and how to apply.

Finally, why don't you take a look at our mortgage company reviews, which combine customer ratings with our expert analysis to identify britain's best mortgage brokers.