Stamp Duty Freeze [Full Guide]

Everything you need to know about the new Stamp Duty regulations

Stamp Duty 2022

On Wednesday 8th July, the chancellor announced a nine month freeze on stamp duty for the first £500,000 across the entirety of England & Northern Ireland. These new measures are set to stimulate the economy and housing market. We will cover everything you need to know in this article


What is stamp duty

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Stamp Duty (SDLT) is a charge you pay to the government for properties purchased in England & Northern Ireland. The amount of stamp duty you pay depends on how expensive the house is and whether or not you are a first time buyer.

Usually, you pay no stamp duty on anything up to £125,000. And if you are a first time buyer you pay no stamp duty on the first £300,000 and then 5% on anything over that.

Here is a table for how things used to look for non first time buyers:

This is of course ‘bracketed’ taxation, meaning you only pay that percentage of tax for that range. In other words you only pay 12% tax on everything over £1.5 million (if you’d be so lucky!)

What's changed with stamp duty?

On Wednesday 8th July the Government has made an unprecedented change to stamp duty. The new rule is that you will pay no stamp tax on the first £500,000. This will last for 9 months up until 31st March 2021. More expensive properties will only be taxed above this amount.

This is excellent news for anyone interest in buying a new home. And thanks to this new change you can save up to £15,000 when buying a new home.

This change has been created to stimulate the UK economy following the economic impacts of COVID-19. According to the a leading index, UK house prices have fell month on month for four consecutive months (though house prices are up 2.5% over the last 12 months).

Chancellor of the exchequer Rishi Sunak intends to stimulate the economy and get the UK population buying properties once again.

Interestingly, the average stamp duty bill will reduce by £4,500. It is expected that 9 out of 10 people will pay no stamp duty whatsoever 😱

You can calculate how much stamp tax you will pay here.

How does the new stamp tax work?

How does stamp duty work?

You can find out how much you would usually pay with our stamp tax calculator. However, during this 9 months, this is how it will work if you’re buying a new home.

If you’re buying a new home which is valued £500,000 or less and it is your only property you will pay HMRC £0 in stamp duty. If you are buying an additional property then a 3% surcharge will still be applied.

Here is how the rest of the property bracket taxation will work:


£500,001 to £925,000= 5% tax

£925,001 to £1.5 million = 10% tax

£1.5 million or greater = 12% tax

breakdown of tax stamp duty

How long will the new stamp duty rates last?

The stamp duty freeze will last for 9 months only. It applies to any properties purchased between 8th July 2020 to 31st March 2021.

One of the impacts of this policy will almost certainly be a surge in housing demand. Those who planned on purchasing outside of this window will bring their purchase forward which may lead to a slump on house sales from April 2021.

Can I still benefit if I have already bought a home?

The stamp duty freeze applies from Wednesday 8th March 2020. Your stamp duty is calculated at the point of completion, not when you exchange contracts.

So, if you have already moved in you will unfortunately lose out on this government incentive. if you have exchanged contracts but are yet to move in you will benefit from the new stamp duty releif.

Will the stamp duty cut be backdated?

Will stamp duty be backdated?

Understandably, everyone who has completed on their property before the stamp duty freeze will want to see it backdated. For lots, this will be a cost of over £10,000.

Whilst the chancellor hasn’t made a comment on this yet per se it is very unlikely that any stamp duty will be backdated.

This is because the purpose of this initiative is to stimulate activity within the property sector. From the government’s perspective, if you’ve already moved you don’t need ‘stimulating’.

It can feel harsh for those of us that missed out narrowly. Typically whenever a new policy is introduced (taxation or otherwise) it is effective from the date at which it was introduced. They must draw a line somewhere.

However, there is great news for anyone that has bought recently. This measure will send a surge of movers to the market which experts anticipate driving up house values in the short-mid term.

Stamp duty facts

stamp duty facts

Here are some stamp duty facts you may find interesting! 🤯

  1. The government takes over £11bn per year from stamp duty, according to the latest figures from HM Revenue & Customs
  2. 2% of the treasury’s income comes directly from stamp duty
  3. The stamp duty freeze will cost the treasury around £3.8bn
  4. The term ‘stamp duty’ is literally the cost of marking your house purchase document with a Royal stamp.
  5. Stamp tax is thought to have come from the 17th century where a competition was held to think of a new type of tax. It currently remains one of the oldest taxes in the UK.
  6. Properties in Scotland don’t pay stamp duty, it is instead called Land & buildings Transaction Tax.


Will this stamp duty freeze have an impact?

impacts of stamp duty

It’s difficult to say for certain what the impacts of the freeze on stamp duty will be. Some experts expert this surge of demand to drive property prices up. Others believe there won’t be too much of an impact as there are plenty of properties for sale already.

We can assume that people will be looking to complete their purchase within this 9 month window due to the tax breaks meaning more will sell than usual. However, economically, many brits are in an unstable position to purchase a home. Thousands have lost their job or have been in receipt of reduced income meaning they have less cash reserves and so unable to capitalise on this opportunity. That said, this is only going to make properties more affordable and accessible and in these turbulent times that is certainly welcomed.

First time buyers (explore)

Moving home checklist (read)

Moving home utilities checklist (read)

If you're moving home

The Stamp Tax changes will save you money. If you’re moving home, you can use the below home setup service to save time & money.

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