Do You Pay Stamp Duty on a New Build

Yes, stamp duty is payable on new build properties in the UK, just as it is on most other residential property purchases. The official term is Stamp Duty Land Tax (SDLT) in England and Northern Ireland, Land and Buildings Transaction Tax (LBTT) in Scotland, and Land Transaction Tax (LTT) in Wales. How much you pay depends on the purchase price of the property and whether you qualify for any reliefs, such as being a first-time buyer.

How Stamp Duty Works on a New Build

When buying a new build, stamp duty is calculated based on the full purchase price of the property. This includes the cost of the home and any extras that are part of the agreed price, such as fitted kitchens, flooring or landscaping. However, stamp duty is not charged on optional upgrades that are invoiced separately after contracts are exchanged.

For example, if you buy a new build for £350,000 in England and you are not a first-time buyer, you will pay stamp duty based on the current thresholds set by HMRC. These bands are subject to change, but as of 2025, stamp duty is usually charged at 5 percent on the portion between £250,001 and £925,000.

First-Time Buyer Relief

If you are a first-time buyer purchasing a new build in England or Northern Ireland, you may be eligible for stamp duty relief. This allows you to pay no stamp duty on the first £425,000 of a property priced up to £625,000. Above this threshold, normal rates apply on the balance.

First-time buyer relief only applies if all purchasers are buying their first property and intend to live in it as their main residence. Shared ownership purchases may also qualify for special rules, depending on how the lease is structured and whether the buyer elects to pay on the full market value or just the initial share.

Scotland and Wales Differences

In Scotland, new builds are subject to LBTT, and in Wales, LTT applies. Each country has its own rates and bands, and they differ slightly from those in England. First-time buyer relief may also apply, although the thresholds and eligibility criteria vary. Buyers of new build properties in these nations should check the latest rates from Revenue Scotland or the Welsh Revenue Authority.

When Is Stamp Duty Paid

Stamp duty must be paid within 14 days of completing the purchase, not when you exchange contracts. Your solicitor or conveyancer will usually handle this on your behalf, ensuring the return is submitted and payment made on time. Failure to pay within the deadline can result in penalties and interest.

Developer Incentives and Stamp Duty

Some developers offer to cover stamp duty costs as part of new build sales promotions. This can be an attractive incentive, especially for buyers on tighter budgets. However, these offers may only apply to homes under a certain price or to specific plots and are often factored into the overall marketing strategy. Even if the developer pays the stamp duty on your behalf, it still needs to be declared and processed in the usual way.

Conclusion

Yes, you do pay stamp duty on a new build home unless you are eligible for first-time buyer relief or a developer offers to cover it as part of the sale. The amount depends on the property value, your personal circumstances and the location of the property. Understanding your obligations and exploring any available reliefs or incentives can help you budget accurately when purchasing a new build.