Do you pay stamp duty on new build homes?

By:
 Avant Homes

Updated:
 12 February 2025

One of the recurring questions we get asked the most by customers purchasing a new build home revolves around Stamp Duty Land Tax (SDLT for short) and whether they must pay it. 

The answer to this is rather straightforward, which we’ll get into, but first, let’s talk about SDLT, or Land and Buildings Transaction Tax (LBTT) as it’s known in Scotland. 

What is stamp duty in the UK?

Stamp duty is a tax collected from a house buyer by the UK government whenever a single property valued over a certain threshold is bought. This includes new build homes and second-hand properties. 

If this isn’t paid, a property cannot be legally bought in the UK. 

The tax’s origins can be traced all the way back to 1694 as one of the methods used to raise funds for the war against France. However, back then, properties weren’t the only items subject to tax – hats and medicine were also considered fair game. 

Historically, it’s not been the most popular of taxes and was one of the primary drivers of the American revolution, but it’s now compulsory, meaning it needs to be paid whether we like it or not!

It’s also important to note that the tax applies to all property types, meaning it doesn’t matter if it’s a freehold, a leasehold, a flat, a new build house or even a bungalow. 

Stamp duty is payable regardless of whether you are buying your new house with a mortgage or outright with cash, and anything fitted (i.e., a fitted wardrobe, a fitted kitchen or an add-on conservatory) is considered part of the house’s overall value and will be taxed by the UK government. 

How much is stamp duty in the UK?

For non-first-time buyers the amount you pay on your stamp duty is based on when you bought the property, how much you paid for it and whether you're eligible for relief or an exemption.

You usually pay 5% on top of the rates below if you own another residential property.

Current SDLT rates:

  • If your property is valued at £250,000 or less, you won’t need to pay any stamp duty. 
  • If your property is valued between £250,001 and £925,000 (for the portion from £250,001 to £925,000), the stamp duty land tax (SDLT) rate is 5%.
  • If your property is valued between £925,001 to £1.5 million (for the portion from £925,001 to £1.5 million), the SDLT rate is 10%.
  • If your property is valued above £1.5 million (for the portion above this figure), the SDLT rate is 12%.

To help make sense of it all, the Government website page on stamp duty land tax illustrates what this might look like for a property worth £295,000:

  • 0% on the first £250,000 = £0
  • 5% on the final £45,000 = £2,250
  • Total Stamp Duty = £2,250

Please note these rates are changing from April 1st, 2025. Take a look at our guide on the stamp duty threshold changes for more information.

How much is stamp duty for first time buyers?

At their current levels, first time buyers pay no stamp duty on new build properties worth up to £425,000. This is called first time buyer relief and has been extremely helpful for people getting onto the property ladder. 

However, this threshold will change to £300,000 from April 1st, 2025, giving less leeway for first time buyers.

What about stamp duty on second homes?

Unfortunately, this is when SDLT really comes into play, and anyone buying second homes (new build or not) in England and Northern Ireland over £40,000 are subject to the following rates:

  1. Up to £250,000 = 5%
  2. Between £250,001 and £925,000 = 10%
  3. Between £925,001 and £1.5 million = 15%
  4. Over £1.5 million = 17%.

However, these thresholds will also change on April 1st, 2025.

Is there stamp duty in Scotland?

While it would be great if there wasn’t, there certainly is stamp duty in Scotland, even if it’s called something else: the Land and Buildings Transaction Tax (LBTT).

Overall, the same principles apply to residential properties in Scotland, but the bands vary slightly:

  1. Less than £145,000 = 0%
  2. £145,001 to £250,000 = 2%
  3. £250,001 to £325,000 = 5%
  4. £325,001 to £750,000 = 10%
  5. Over £750,000 = 12%.

LBTT fees also vary if you're buying a second property or if you're a first-time buyer.

How to pay stamp duty

Now for the good news: your solicitor or conveyancer will generally pay Stamp Duty on your behalf. They will then generally add the amount to their fees or ask for the money upfront.

Stamp Duty must be paid within two weeks of your property's completion date. Your solicitor or conveyancer must also submit a return to HMRC, or you could be liable to pay a fine, so make sure you ask for proof of this when you complete.

Stamp duty calculator

As you move up the property ladder, it's likely that stamp duty will be something you have to pay.
Therefore, don’t let it creep up on you and make sure you've factored it into your home buying fees!

You can also use the government’s free stamp duty land tax calculator if you're not sure or ask your Sales Advisor who will be happy to help you work it out!

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