Do you pay Stamp Duty on a new build?

Do you pay stamp duty on a new build?

The stamp duty paid on a property in the UK can vary significantly depending on several factors.

In this blog, we’ll answer your questions about stamp duty including what it is, who needs to pay what and when. 

What is stamp duty?

Stamp duty is a tax levied against a buyer by the UK government whenever a single property valued over a certain threshold is purchased. This includes new build homes and second hand properties. 

If this is not paid, a property cannot be legally bought in the UK. 

The tax’s origins can be traced all the way back to 1694 when it was one of the methods used to raise funds for the war against France. Although, back then, it was not just property that was subject to tax – purchases of 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.  

How much is stamp duty for first-time buyers?

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

This threshold will change to £300,000 at the end of March 2025.

This means that if a first-time buyer buys a property at the average UK asking price of £370,759 they will pay £3,538 in stamp duty from March 2025, compared with nothing now.

How is stamp duty calculated?

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.

Rates up to 31st March 2025:

  • 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 1st April 2025. Take a look at the Government stamp duty land tax page for more information.

What contributes towards my property’s stamp duty?

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. 

Anything removable, such as your curtains or your TV, is not.

When do you pay stamp duty on a new build?

Your stamp duty must be paid within 14 days of your new build being completed. This payment itself would not be made directly by you. Your solicitor or conveyancer would normally pay the stamp duty on your behalf but confirm with your individual service provider.

We hope our blog has been useful, if you have any questions on stamp duty, your Sales Advisor will be happy to help! 

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