Stamp duty on new builds

Stamp duty on second homes and buy-to-let properties

Stamp duty on new builds

Stamp duty for new build homes is similar to stamp duty for any new home, whether it’s been built recently or not. Below we look at whether you’ll have to pay stamp duty if you’re purchasing a new build, how much you might have to pay, and whether the payment can be waived.

What is stamp duty payable on?

Generally speaking, you’ll have to pay stamp duty on portions of the price of your home above £125,000. This means that you won’t be taxed on the first £125,000, but will have to pay stamp duty for anything beyond that price.

Property value Stamp duty rate
Up to £125,000 0%
The next £125,000 (from £125,001 to £250,000) 2%
The next £675,000 (from £250,001 to £925,000) 5%
The next £575,000 (from £925,001 to £1.5 million) 10%
The rest of the amount (over £1.5 million) 12%

The rules are slightly different if you’re a first-time buyer or if you’re buying a second home or buy to let property. There are also special rates for some other situations, such as:

  • property purchased by corporate bodies
  • if you’re purchasing six or more properties in one go
  • shared ownership homes
  • multiple purchases and transfers between the same seller and buyer
  • purchases that mean you own more than one property, and
  • residential property purchased by companies and trusts.

It’s important that you pay the stamp duty charges to prevent getting penalised. When you’re budgeting for a new home purchase, you’ll also want to consider other costs when buying a new home.

Do you have to pay stamp duty on a new home?

Yes, or you’ll incur penalties. There are two main types of penalties: on submissions and payment. If you have to pay stamp duty on your new home, you’ll need to get HM Revenue and Customs (HMRC) to stamp your documents. This needs to happen within 30 days of when they’re signed and dated. The penalty for late submissions is as follows:

Lateness of submission Penalty amount
Up to 12 months 10% of the duty charge (maximum of £300)
12-14 months 20% of the duty charge
More than 24 months 30% of the duty charge

If you’re late in paying your stamp duty fees, you’ll be charged interest on top of what you owe, unless the interest is less than £25. HMRC uses the interest rate set by HM Treasury to figure out how much you’ll owe.

Can stamp duty on my new house be waived?

There are many situations where some buyers could potentially get reliefs or exemptions on stamp duty charges. Some property developers also offer a ‘stamp duty discount’ on new builds.

If you’re planning on applying for a mortgage to buy a new build home, you may want to check your Equifax Credit Report & Score beforehand – it’s free for the first 30 days and then £7.95 monthly. The report shows you your borrowing history, while the score gives you an indication on how creditworthy a lender may think you are.

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