When buying a new home, particularly a new build home, one of the biggest questions we find that buyers ask is, ‘do you pay stamp duty on a new build?’. If you’re a first-time buyer, moving up the property ladder, or investing, understanding how Stamp Duty Land Tax (SDLT) applies to the property you’re buying is especially important when planning your budget.
At Mulberry Homes, we specialise in beautifully designed new build properties across many desirable locations. We understand that the costs involved in buying a home can be confusing, so to help you feel confident about your purchase, we’ve created this comprehensive guide explaining when and how Stamp Duty applies to new build homes, how much you might pay, and what exemptions or reliefs could reduce it.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax you must pay when you buy a property or land over a certain price in England and Northern Ireland. The amount of SDLT you pay depends on:
The purchase price of your property
Whether you’re a first-time buyer
Whether you already own other properties
It is worth noting that in Wales and Scotland, there are equivalent taxes (Land Transaction Tax (LTT) and Land and Buildings Transaction Tax (LBTT)).
Do you pay stamp duty on new build properties?
In short, yes you do usually pay stamp duty on a new build. Buying a new build property is generally treated in the same way as purchasing any other residential property when it comes to SDLT. However, there are some specific circumstances (such as ‘first-time buyer relief’, for example) that can reduce the amount of stamp duty you pay.
Just because a property is brand new, it doesn’t exempt it from stamp duty, however, there are some specific circumstances (such as first-time buyer relief for example) that can reduce the amount of stamp duty you pay. We do also offer promotions on selected plots from time to time whereby you may be able to benefit from assistance with the cost of your stamp duty. Please speak to the sales team on your development of choice for more information.
When do you pay stamp duty on a new build?
Stamp Duty is payable within 14 days of completing the purchase of your new build home. Note - ‘Completion’ is the point at which ownership is legally transferred to you.
Because new build properties often involve paying a reservation fee and exchanging contracts before the home is built, many buyers are unsure about the timing of stamp duty. You do not pay stamp duty when you exchange contracts (though you commit to the purchase at that point).
You only pay stamp duty once:
The new build is finished
You receive your keys
The purchase is legally completed
Your solicitor or conveyancer will usually handle the filing of the SDLT return and the payment on your behalf, so you don’t need to navigate this alone unless you choose to.
How much is stamp duty on a new build?
How much stamp duty you pay depends on the price of your new build property and your circumstances. Below are the standard residential SDLT rates (correct as of 2025 - Gov.uk):
| Property or lease premium or transfer value | SDLT rate |
|---|---|
| Up to £125,000 | Zero |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
For example, if you were to buy a house for £295,000 (from April 2025), the SDLT you owe will be calculated as follows:
0% on the first £125,000 = £0
2% on the second £125,000 = £2,500
5% on the final £45,000 = £2,250
total SDLT = £4,750
First-time buyer stamp duty relief on new builds
If you’re a first-time buyer, you may qualify for relief that significantly reduces your SDLT liability. As a first-time buyer purchasing a new build, you pay:
You’ll pay:
no SDLT up to £300,000
5% SDLT on the portion from £300,001 to £500,000
If the price is over £500,000, you cannot claim the relief. Follow the rules for people who’ve bought a home before.
For example, if you are a first-time buyer and purchase a property for £500,000. The SDLT you owe will be calculated as:
0% on the first £300,000 = £0
5% on the remaining £200,000 = £10,000
total SDLT = £10,000
Additional property stamp duty surcharge
If you already own another residential property anywhere in the world and you are buying a new build as a second home or investment, you’ll typically pay a 5% SDLT surcharge on top of the standard rates.
So, when thinking about how much stamp duty is on a new build, always factor in whether this extra surcharge applies to your circumstances.
Do developer incentives affect stamp duty?
Another common question we get asked is whether incentives offered by developers (which could include contributions to your legal fees, paying for upgrades, or offering cashbacks) could affect the amount of stamp duty you owe.
The answer is often yes. HMRC requires you to declare the market value of the property plus any non-cash incentives you receive. For example:
If you buy a new build for £300,000 and the developer provides £10,000 towards your deposit, your SDLT may be calculated as if you paid £310,000.
We advise that you always ask your solicitor to clarify whether any incentives will affect the consideration value used to work out your SDLT.
Our top tips for managing stamp duty costs
Stamp duty is a moving cost that shouldn’t be forgotten. Here are some of our top tips when it comes to managing the cost of stamp duty
Budget for stamp duty early - You should factor in your SDLT liability alongside your deposit and moving costs.
Check your eligibility for any SDLT relief - First-time buyer? Confirm you qualify for the higher threshold.
Remember to ask about incentives - Clarify whether incentives from your developer will change your SDLT calculation.
Speak to professionals - Your solicitor or conveyancer can provide specific advice tailored to your situation.
So, do you pay stamp duty on a new build? Yes, unless you qualify for first-time buyer relief or your purchase price falls below the £300,000 threshold. Understanding when you pay stamp duty, how much you’ll need to budget, and what can impact your liability is key to a stress-free move.
Why choose Mulberry Homes?
At Mulberry Homes, we are committed to making your new build journey smooth, transparent, and most importantly, exciting! Our experienced team will guide you through the process and help you understand when you pay stamp duty on a new build and how much stamp duty applies to your chosen home.
With a range of stunning developments across the country, high-quality specifications, and expert customer service, Mulberry Homes is here to help you find the perfect place to call home.
If you’d like to know more about our developments, incentives, and how we can help you buy your dream new build home, contact the Mulberry Homes team today.
