New Build Stamp Duty: Developer Incentives & Fixtures
Everything you need to know about SDLT on new build properties — from developer incentives to completion timing and part-exchange schemes.
Key Takeaways
- New build properties are taxed at exactly the same SDLT rates as existing properties — there is no new build premium or discount
- Developer incentives such as carpets, white goods, upgrades, or cashback do not reduce SDLT; tax is on the full purchase price
- Fixtures (permanently attached to the building) are always included in the SDLT calculation; chattels (movable items) may sometimes be excluded, but HMRC scrutinises these closely
- In a part-exchange scheme, SDLT is calculated on the full new build price, not the net cash amount you pay after the developer takes your old property
- SDLT is due 14 days after legal completion, which for new builds can be months or even years after you exchanged contracts — budget for it at completion, not exchange
- First-time buyer relief (0% up to £300,000 on properties up to £500,000) applies equally to new builds
- Help to Buy equity loans (legacy scheme) are separate from the purchase and do not affect SDLT calculation in most cases
- New build leasehold flats use a new lease grant (not assignment) — check whether any ground rent NPV SDLT applies
In this article
New Build SDLT: The Basics
Buying a new build property from a developer is fundamentally different from buying on the open market, yet for SDLT purposes the core rules are nearly identical. The same rate bands apply, the same reliefs are available, and the same 14-day deadline from completion applies. Use our stamp duty calculator to get an instant figure.
Where new builds differ from resale properties is in the practical circumstances surrounding the transaction: exchange can occur months or years before completion, developer incentives are common, and the property may not exist yet when you sign contracts. Each of these creates SDLT planning considerations that resale buyers rarely face.
The full guide to standard property purchase SDLT covers the foundational rules that apply equally to new builds.
Same Rates as Existing Properties
There is no new build premium or discount for SDLT. The same progressive rate bands apply regardless of whether you are buying a Victorian terrace or a brand-new development.
Standard SDLT Rates (Post-April 2025)
| Price Band | Standard | First-Time Buyer |
|---|---|---|
| Up to £125,000 | 0% | 0% |
| £125,001 to £250,000 | 2% | 0%* |
| £250,001 to £300,000 | 5% | 0%* |
| £300,001 to £500,000 | 5% | 5%* |
| £500,001 to £925,000 | 5% | 5% |
| £925,001 to £1,500,000 | 10% | 10% |
| Above £1,500,000 | 12% | 12% |
*FTB rates apply only on properties up to £500,000 where all buyers are first-time buyers.
Developer Incentives: Not Deductible from SDLT
When buying from a developer, it is common to receive incentives as part of the deal: fitted carpets, white goods, upgraded kitchens or bathrooms, a contribution to your legal fees, or a cashback payment at completion. These sweeteners are commercially attractive but have no effect on your SDLT calculation.
SDLT is charged on the full purchase price agreed with the developer. If you pay £350,000 for a new build and receive £10,000 of incentives, SDLT is still on £350,000. The developer's contribution does not reduce the consideration for SDLT purposes.
Common Incentives That Do Not Reduce SDLT
- • Fitted carpets and floor coverings
- • Kitchen appliances (fridge, washing machine, dishwasher)
- • Upgraded finishes (higher-specification kitchen, bathroom tiles)
- • Landscaping, parking spaces, or storage units bundled into price
- • Developer-paid legal fee contributions
- • Stamp duty contributions (if the developer pays your SDLT, it may be reportable as additional consideration — seek advice)
One important note: if the developer agrees to pay your SDLT for you (a "stamp duty paid" promotion), this payment may itself constitute consideration for SDLT purposes, potentially creating a circular calculation. Seek specialist advice if a developer offers to cover your stamp duty costs.
Fixtures vs Chattels: When Can You Reduce the SDLT Base?
The distinction between fixtures and chattels can, in theory, reduce the SDLT base. However, for new build properties, this is rarely appropriate and HMRC scrutinises any such allocation carefully.
What Are Fixtures?
Fixtures are items permanently attached to the property — they pass with the building on sale. Examples include fitted kitchens, bathroom suites, built-in wardrobes, central heating systems, light fittings, and structural elements. These are always part of the SDLT calculation on a new build.
What Are Chattels?
Chattels are movable items not permanently attached to the building — freestanding furniture, carpets (which are not fixed, technically), and appliances that can be unplugged and removed. If a separate price is agreed for chattels included in the transaction, that value can in principle be excluded from SDLT.
HMRC Scrutiny on New Builds
HMRC is particularly alert to chattel allocations on new build purchases, where developers may try to apportion part of the price to movable items to reduce buyers' SDLT. Any chattel allocation must be at market value for the items concerned and must be genuinely agreed and documented separately. Inflated chattel valuations can result in HMRC investigations and penalties.
Part-Exchange Schemes and SDLT
Many large developers offer part-exchange schemes where they accept your existing property as part-payment for the new build. This can be attractive because it removes the need to sell on the open market, but it does not reduce your SDLT liability.
How SDLT Works in Part-Exchange
In a part-exchange, the total consideration for SDLT is the full market value of what you are acquiring. The developer's acquisition of your old property is a separate transaction — the developer pays SDLT on what they pay for your old property (which may be at a discount to market value), and you pay SDLT on the full new build price.
Part-Exchange SDLT Example
- • New build price: £450,000
- • Developer takes your existing home: £200,000 (as part-payment)
- • Net cash you pay: £250,000
- • SDLT is calculated on: £450,000 (full new build price)
- • Standard buyer SDLT: 0% on £125k + 2% on £125k + 5% on £200k = £12,500
You pay SDLT on the full £450,000, not the £250,000 cash balance. Budget accordingly when assessing the true cost of a part-exchange deal.
Note that in a part-exchange, if the developer acquires your home before you complete on the new build, you may temporarily own two properties — potentially triggering the additional dwelling surcharge (5%) if you exchange contracts on the new build while still owning the old one. The sequence and timing of these transactions matters enormously. Seek legal advice specific to your part-exchange arrangement.
Completion Timing with Developers
One of the most practically significant differences between buying new and buying on the open market is the gap between exchange and completion. With a resale property, exchange and completion are often weeks apart. With new builds, you can exchange on a property that will not be built for 12-18 months.
This creates a budgeting challenge: you commit at exchange to a purchase price that determines your SDLT, but you do not actually pay that SDLT for potentially over a year. In the intervening period, SDLT rates may change, and your financial circumstances may shift.
SDLT Rate Change Risk
SDLT rates are set by legislation and can change between exchange and completion. Your SDLT obligation is calculated at the rates in force on the completion date (effective date), not the exchange date. If rates increase before your new build completes, your SDLT bill will be higher than you expected at exchange. Always budget using current rates and monitor any announced changes.
Delayed Completion and Substantial Performance
On some new build transactions, a developer may request that you pay a large sum (exceeding 90% of the purchase price) before formal completion — for example, as a staged payment. If this occurs, the substantial performance rules are triggered, and SDLT becomes due at that earlier point rather than at formal completion.
Help to Buy Legacy Schemes
The Help to Buy Equity Loan scheme closed in March 2023. However, buyers who purchased under the scheme are still dealing with its implications, including the eventual repayment of the equity loan. Understanding how Help to Buy interacted with SDLT is still relevant for those who used the scheme.
SDLT under Help to Buy
SDLT on a Help to Buy purchase was calculated on the full purchase price of the property, not the buyer's equity stake. The government equity loan element was not deducted from the SDLT base. A first-time buyer purchasing a £400,000 new build with a 20% equity loan still paid SDLT on £400,000.
First-time buyer relief was available alongside Help to Buy and was stackable — buyers could benefit from both the 0% FTB threshold and the equity loan. On a £400,000 property, a FTB paid £5,000 SDLT (0% up to £300k, 5% on £300k-£400k).
When Help to Buy equity loans are repaid, there is no additional SDLT event. The repayment is a financial transaction between you and Homes England, not a land transaction.
Worked Examples
Example 1: Standard Buyer — £320,000 New Build House
Includes £5,000 of developer incentives (carpets and appliances). SDLT is on the full £320,000.
| Band | Rate | Amount | Tax |
|---|---|---|---|
| £0 – £125,000 | 0% | £125,000 | £0 |
| £125,001 – £250,000 | 2% | £125,000 | £2,500 |
| £250,001 – £320,000 | 5% | £70,000 | £3,500 |
| Total SDLT | £6,000 | ||
First-time buyer on same property: 0% up to £300k (£0), 5% on £300,001-£320,000 (£1,000). Total: £1,000.
Example 2: Part-Exchange — £480,000 New Build
Developer accepts existing £220,000 property as part-payment. SDLT is on the full £480,000 new build price.
| Band | Rate | Amount | Tax |
|---|---|---|---|
| £0 – £125,000 | 0% | £125,000 | £0 |
| £125,001 – £250,000 | 2% | £125,000 | £2,500 |
| £250,001 – £480,000 | 5% | £230,000 | £11,500 |
| Total SDLT (on full £480,000) | £14,000 | ||
You pay £14,000 SDLT even though you only paid £260,000 net in cash. Budget this from your own funds separate from the part-exchange arrangement.
New Build Leasehold Flats
New build flats are almost always sold on new leases granted by the developer as freeholder (or their nominee). This means you are receiving a new lease grant rather than an assignment. As explained in our leasehold flat purchase guide, a new lease grant triggers potential SDLT on the NPV of ground rent in addition to the premium.
Under the Leasehold Reform (Ground Rent) Act 2022, all new residential leases granted on or after 30 June 2022 must have a ground rent of zero (a peppercorn). Since the NPV of zero rent is zero, no additional SDLT on rent arises for new build flats purchased under post-2022 leases.
Planning Your SDLT Budget for a New Build
- Calculate at exchange: Work out your SDLT using our calculator when you exchange contracts. Lock in the amount in a savings account and do not touch it — you will need it at completion.
- Budget for current rates: SDLT rates apply at completion. If rates change before your new build finishes, your bill changes. Check rates again in the months before completion.
- Do not count incentives: Developer incentives are welcome benefits but zero impact on your SDLT. Budget on the full purchase price, not the net effective cost.
- Part-exchange: full price basis: If using part-exchange, you still owe SDLT on the full new build price. Include this in your part-exchange deal assessment.
- FTB status check: Confirm your first-time buyer status before exchange. If any joint buyer previously owned property, FTB relief does not apply.
Calculate Your Stamp Duty
Use our calculator to work out the exact stamp duty for your property purchase.
Your Results
Stamp Duty to Pay
£5,000
Effective tax rate: 1.67%
Tax Breakdown
| Band | Rate | Tax |
|---|---|---|
| £0 - £125,000 | 0% | £0 |
| £125,001 - £250,000 | 2% | £2,500 |
| £250,001 - £300,000 | 5% | £2,500 |
| Total | £5,000 | |
£0 - £125,000
0%
£0
£125,001 - £250,000
2%
£2,500
£250,001 - £300,000
5%
£2,500
Total
£5,000
Tax by Band
Added to 25-Year Mortgage
£29/month
Based on 5% interest rate, added to loan amount
Frequently Asked Questions
Do developer incentives reduce the stamp duty I pay?
No. Developer incentives such as carpets, white goods, or upgrades do not reduce SDLT. Tax is calculated on the full purchase price agreed with the developer, regardless of what extras are included.
When do I pay stamp duty on a new build purchased off-plan?
SDLT is due within 14 days of legal completion, not exchange. With off-plan new builds, completion can be 12-18 months after exchange. Budget for the SDLT payment at completion and ensure your funds are accessible at that time.
How does part-exchange affect my stamp duty?
SDLT is calculated on the full new build price, not the net cash you pay after part-exchange. If you buy a £400,000 new build and the developer takes your £150,000 home as part-payment, SDLT is on £400,000, not £250,000.
Is stamp duty the same on new builds as existing properties?
Yes. New builds are taxed at the same SDLT rates as existing properties. The same reliefs (first-time buyer, multiple dwellings) and surcharges (additional dwelling, non-resident) apply equally.
Can I deduct fixtures from my new build stamp duty calculation?
Fixtures permanently attached to the building cannot be deducted. Chattels (movable items) could theoretically be excluded if separately valued at market rate and genuinely agreed, but HMRC scrutinises new build chattel allocations closely. Seek professional advice before attempting any allocation.
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Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Stamp Duty Calculator to help buyers understand the complex world of property transaction taxes.