Great news for buyers and sellers with the temporary increase to the nil rate band for Stamp Duty Land Tax, which is the rate before you start paying Stamp Duty on residential property has been extended.
Rather than ending on 31 March 2021, the temporary nil rate band of £500,000 will be in place until 30 June 2021. Then from 1 July 2021 to 30 September 2021 the nil rate band will be £250,000. The zero rate band will return to the standard amount of £125,000 on 1 October 2021.
Residential Rates on purchases from 8 July 2020 to 30 June 2021
If you purchase a residential property between 8 July 2020 to 30 June 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.
How has the stamp duty cut affected the market?
Without question the stamp duty cut has resulted in greater demand and higher house prices. Provisional figures from HM Revenue & Customs show that 129,400 transactions went through in the UK in December – compared to 87,040 in 2019 and 83,880 in 2018.
Rightmove shows that the average number of days it took to sell a property fell to just 49 in November, compared to 67 a year earlier. When it comes to house prices, figures from the Land Registry showed an 8.5% year-on-year rise in December.
Zoopla says that at least 740,000 buyers will have benefited from the stamp duty cut by the time it ends. It says 600,000 buyers who agreed a purchase from May 2020 onwards won’t have to pay any stamp duty – saving an average of £4,660 – while a further 140,000 buyers purchasing homes for £500,000 or more will save the maximum of £15,000.