Help to Buy and Stamp Duty: What Existing Borrowers Need to Know
The Help to Buy equity loan scheme closed in March 2023. This guide is for existing borrowers navigating stamp duty rules, interest charges, repayment, and selling.
Scheme Closed — Existing Borrowers Only
Applications for the Help to Buy equity loan ended 31 October 2022. The scheme itself closed on 31 March 2023. No new applications are possible. This guide is exclusively for people who already have a Help to Buy equity loan.
If you are a new buyer looking for government schemes, scroll to the Alternatives section below.
In this article
Help to Buy is Closed: Existing Borrowers Only
The Help to Buy: Equity Loan (2021–2023) scheme ran from 1 April 2021 to 31 March 2023. Under this scheme, the government lent first-time buyers up to 20% of the purchase price (40% in London) interest-free for the first five years. Buyers needed a 5% deposit and a repayment mortgage for the remaining amount.
| Scheme Version | Period | Equity Loan (England) | Interest-Free Period |
|---|---|---|---|
| 2013–2021 Scheme | Apr 2013 – Mar 2021 | Up to 20% (40% London) | 5 years |
| 2021–2023 Scheme | Apr 2021 – Mar 2023 | Up to 20% (40% London) | 5 years |
Property price caps applied regionally in the 2021–2023 scheme — for example, £600,000 maximum in London, £437,600 in the South East. These limits no longer apply to new buyers since the scheme has closed. If you bought under either scheme, the rules in this guide apply to your existing equity loan.
Stamp Duty on the Full Purchase Price
A common misconception: many Help to Buy buyers thought their SDLT would be calculated on their own contribution (deposit + mortgage) rather than the full purchase price. This is incorrect. SDLT is always charged on the full market purchase price regardless of how much the government lent you.
Worked Example: £350,000 Property in 2022
- Purchase price: £350,000
- Buyer's deposit (5%): £17,500
- Help to Buy equity loan (20%): £70,000
- Repayment mortgage (75%): £262,500
- SDLT calculation base: £350,000 (full price)
- FTB SDLT (under Oct 2022 pre-April-2025 rates): £0 (was free up to £425k)
- FTB SDLT (from 1 April 2025 rates): £2,500 (5% × £50k above £300k)
Most Help to Buy buyers who purchased between April 2021 and September 2022 benefited from the temporary stamp duty holiday, which raised the FTB nil-rate threshold to £425,000. Buyers who completed between October 2022 and March 2023 paid SDLT under the standard (post-holiday) FTB rules at that time.
Your SDLT was calculated correctly at the time. If you are now selling or remortgaging, the historical SDLT payment is a sunk cost. The SDLT only becomes relevant again if there is a subsequent purchase — not on remortgaging.
Equity Loan Interest: Year 6 Onwards
The equity loan is interest-free for the first five years. From year six, a management fee (effectively interest) applies. The rate and escalation differ between the two scheme versions:
| Year | 2021–2023 Scheme Rate | 2013–2021 Scheme Rate |
|---|---|---|
| Years 1–5 | 0% (interest-free) | 0% (interest-free) |
| Year 6 | 1.75% p.a. on loan amount | 1.75% p.a. on loan amount |
| Year 7 onwards | CPI + 2% per April | RPI + 1% per April |
Example: Interest on a £70,000 Equity Loan
Year 6: 1.75% × £70,000 = £1,225/year (£102/month). Note: the interest does not reduce the outstanding loan — it is purely a management fee on top of your mortgage payments. The loan amount itself only changes when you repay it (partially or fully) or sell.
For buyers who completed in 2021, year six interest began in 2026. For those who completed in 2022 or early 2023, the interest-free period extends to 2027 or 2028 respectively. Check your Homes England loan agreement for your exact start date. There is no SDLT implication from paying equity loan interest — SDLT only applies to property purchases, not to loan fee payments.
Repaying the Equity Loan: What Changes
You can repay the equity loan early — in part or in full — at any time after completing your purchase. Repayment is calculated as a percentage of the current market value, not the original loan amount.
Repayment Calculation Example
Original purchase: £350,000. Equity loan: 20% = £70,000.
Current market value (after 4 years): £420,000. Repayment of full loan: 20% × £420,000 = £84,000 (not the original £70,000).
If the property has fallen in value to £300,000, the full repayment would be 20% × £300,000 = £60,000 — less than borrowed. You benefit from falls in value but lose some of the gain on rises.
SDLT implications of repaying the equity loan: There are no SDLT implications from repaying the equity loan. SDLT was paid in full at purchase on the entire purchase price. A partial or full repayment of the equity loan is simply a debt repayment — it does not constitute a new property transaction.
Minimum repayment: 10% of the current market value (or the full outstanding loan if smaller). You must commission an independent valuation (RICS surveyor) before any partial repayment. The cost of the valuation (typically £200–£500) is paid by the borrower.
Selling Your Help to Buy Property
When you sell your Help to Buy property, Homes England must be notified and their equity share repaid from the sale proceeds. Key points:
- Repayment is percentage-based on sale price: If you took a 20% loan and sell for £450,000, Homes England receives 20% × £450,000 = £90,000.
- You keep 80% of any gain (or bear 80% of any loss) on the property value, proportional to your equity share.
- SDLT on your next purchase: When you buy your next property, you are no longer a first-time buyer. Standard SDLT rates apply. If you are buying an additional property while retaining other property, the 5% surcharge may also apply.
- CGT note: If the property is your primary residence, no capital gains tax applies on the sale. If you have rented it out for any period, partial CGT may apply. The SDLT paid at purchase is an allowable cost that reduces any CGT liability.
There is no SDLT on the sale itself — stamp duty only applies to purchases. The SDLT implications arise on your next purchase, not on selling your Help to Buy home. Use our stamp duty calculator to estimate the cost on your next purchase.
Alternatives for New Buyers in 2026
Since Help to Buy is closed, new first-time buyers in 2026 have these alternatives:
First Homes Scheme
Properties sold at a discount of at least 30% (up to 50%) against market value for first-time buyers and key workers. No equity loan — you buy a discounted property outright. SDLT applies to the discounted purchase price only. Limited availability — check local planning authority and developer websites.
Shared Ownership
Buy a 10–75% share from a housing association. SDLT only on your initial share (or elect to pay on full market value). Rent paid to housing association on the unowned share. Staircase up to 100% over time. See our shared ownership vs outright guide for full cost comparison.
Lifetime ISA (LISA)
25% government bonus on savings up to £4,000/year. Maximum £1,000 bonus per year. Property price limit £450,000. Must be opened before age 40. See our complete LISA strategy guide.
Mortgage Guarantee Scheme
The government guarantees mortgages where the buyer has a 5% deposit (95% LTV). Available on properties up to £600,000. SDLT applies at normal rates — no SDLT reduction. Primarily helps those who have a deposit but face lender reluctance at high LTV ratios.
Remortgaging: SDLT Implications
Remortgaging your Help to Buy property — switching to a new mortgage deal at the end of your fixed term — has no SDLT implications whatsoever. SDLT only applies to the transfer of property ownership (purchases and certain other chargeable transactions). A remortgage does not transfer ownership — it merely changes the lender holding the charge over the property.
Key remortgaging considerations for Help to Buy borrowers:
- Homes England must consent to your remortgage — contact your Help to Buy agent before applying.
- LTV calculation: Your LTV for remortgage purposes is based on the mortgage portion only — the equity loan sits alongside and is not counted as your equity in most lender calculations.
- Capital raising: If you remortgage to release equity for home improvements, this does not trigger SDLT. However, if you try to use released equity to repay the Help to Buy loan, this is handled separately as a repayment event — no SDLT, but the percentage-based calculation still applies.
- Avoid over-borrowing: Remortgaging to add a partner or family member to the mortgage (not the title deed) does not affect SDLT. Adding them to the title deed could constitute a partial transfer with SDLT implications — seek legal advice.
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Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Stamp Duty Calculator to help buyers understand the complex world of property transaction taxes.