Yes — stamp duty applies to new build properties on the same basis as any other purchase. But some developers offer to pay it as an incentive. Here's everything you need to know about SDLT on new builds.
✓ Updated✓ 8 min read
Key Points
Stamp Duty Land Tax (SDLT) does apply to new build properties — same rates as second-hand homes
Following the latest threshold change, the nil-rate band is now £125,000 for standard purchases (from £250,000 previously)
First-time buyers have a higher nil-rate threshold of £300,000 (on properties up to £500,000)
Additional property surcharge of 3% applies if you own any other property worldwide
Some developers offer to pay your SDLT as a sales incentive — always get this in writing
SDLT Rates on New Builds (England & Wales)
The temporary SDLT thresholds that were in place since September 2022 have ended. The rates that now apply are:
Standard Purchase (non-FTB)
Up to £125,000
0%
£125,001–£250,000
2%
£250,001–£925,000
5%
£925,001–£1.5m
10%
Over £1.5m
12%
First-Time Buyer Relief
Up to £300,000
0%
£300,001–£500,000
5%
No relief above £500,000 — standard rates apply on whole purchase
New Build SDLT Examples
Buyer Type
New Build Price
SDLT Due
First-time buyer
£250,000
£0
First-time buyer
£400,000
£5,000
Standard buyer (no other property)
£300,000
£5,000
Standard buyer (no other property)
£450,000
£12,500
Additional property buyer (3% surcharge)
£300,000
£14,000
Additional property buyer (3% surcharge)
£500,000
£27,500
Can the Developer Pay Your Stamp Duty?
Yes — "stamp duty paid" is one of the most common developer incentives, particularly aimed at first-time buyers and in slower markets. Here's how it works in practice:
✓ How it works (the right way)
The developer agrees to pay a cashback contribution equal to your SDLT liability. This appears in the reservation agreement. Your solicitor verifies it. The money is either paid to HMRC directly on your behalf at completion, or credited against the completion funds you owe.
⚠️ Watch for this problem
Some developers inflate the purchase price and then "pay" the stamp duty — effectively making you pay it anyway, embedded in a higher property value. Your mortgage valuation should catch this, but always ensure the contribution is a genuine reduction in cost, not smoke and mirrors.
Special Situations: New Builds with Leases
Some new builds are sold as leasehold rather than freehold. SDLT applies differently:
📋 Leasehold New Build — Additional SDLT on Rent
On a new leasehold property, SDLT is charged on both the purchase price AND any ground rent. If the Net Present Value (NPV) of the ground rent exceeds £125,000, additional SDLT of 1% applies on the excess. For most properties with low or peppercorn ground rent, this won't be an issue — but check with your solicitor if you're buying leasehold with any ground rent.
Off-Plan Purchases: When Is SDLT Paid?
For off-plan new builds, SDLT is payable on completion — not when you exchange contracts. This is important because:
If there's a long gap between exchange and completion (e.g. 12 months for an unfinished new build), your SDLT rate is locked in at the date of exchange — rate changes before completion don't affect you
Your solicitor files the SDLT return and pays HMRC within 14 days of completion
If the developer delays completion significantly, any changes to SDLT rates between your exchange date and the actual completion date may affect your liability — take specialist advice
Calculate Your Stamp Duty
Use our stamp duty calculator to see exactly how much you'll owe on your new build purchase, with first-time buyer relief applied automatically.
No — the standard SDLT rates apply equally to new builds and second-hand properties. There is no new build discount. The only saving comes if the developer pays SDLT as an incentive, or if you qualify for first-time buyer relief.
Do I pay stamp duty if the developer pays it for me?
The legal liability for SDLT remains yours — but the developer contributes cash to cover it. Your solicitor ensures the HMRC return is filed and the tax is paid correctly. You don't need to worry about the mechanics — but you must ensure the contribution is confirmed in writing in your contract.
What if SDLT rates change before my new build completes?
SDLT is generally payable at the rate applicable on the effective date of the transaction — which is the completion date for most purchases. If rates change between exchange and completion (as can happen at completion), you pay the rate in force at completion. Off-plan buyers facing long build timescales should factor this uncertainty in their planning.
Do I pay SDLT if I part-exchange my old home for a new build?
Yes. In a part-exchange, SDLT is calculated on the full price of the new build, not just the cash you're paying. The SDLT is based on the total consideration — including the market value of the property you're exchanging. Your solicitor will calculate this correctly.