When you pay stamp duty on an off-plan or new-build home (2026)

Roughly one in ten homes sold in England and Wales is brand new. In 2024, 72,074 of the 762,281 standard "category A" sales recorded by HM Land Registry were new-builds - about 9.5%. (The 2025 share reads lower, at 5.2%, but new-build sales register on a lag of several months, so the most recent year is understated.) Buying one usually means committing long before the keys exist: a reservation fee, an exchange of contracts on a plot, then completion once the building is signed off. That gap raises a question resale buyers rarely face - when, exactly, is the stamp duty due?

For a typical off-plan purchase in England, the answer is that Stamp Duty Land Tax (SDLT) is payable 14 days after the "effective date", and for most new-build purchases the effective date is completion - the day you collect the keys - not the day you exchanged (HM Revenue & Customs, 2026). Two moments in a new-build timeline can move that date earlier. Here is how the rule works.

The "effective date" starts the clock

Since 1 March 2019, a buyer must file an SDLT return and pay any tax due within 14 days of a transaction's effective date (Finance Act 2003, section 76). That 14-day window applies even where the tax due is nil but a return is still required.

The effective date is normally completion. But under section 44 of the Finance Act 2003, a contract can be "substantially performed" before it completes - and if it is, the effective date jumps back to that earlier point. Two things count as substantial performance:

• the buyer takes possession - moves in, collects the keys, or starts fitting out the property under a licence; or
• the buyer pays a "substantial amount" of the price, which HMRC treats as 90% or more (HMRC Stamp Duty Land Tax Manual).

For the general mechanics of this rule, see substantial performance versus completion. This guide applies it to the specific rhythm of buying new.

Reservation and exchange usually don't trigger it

A new-build reservation fee - commonly a few hundred to a couple of thousand pounds to hold a plot - is nowhere near 90% of the price and gives you no possession. It does not start the clock.

Exchange of contracts is the moment many off-plan buyers expect to matter, because on a new-build it can fall a year or more before completion. But exchanging with the usual deposit - typically 10%, sometimes up to 30% on off-plan - is still not substantial performance: you have not taken possession, and a deposit below 90% of the price is not a "substantial amount". So on a standard off-plan flat, where you exchange, wait for the build, then complete and collect the keys, the effective date is completion, and the 14-day clock starts there (Finance Act 2003, section 44).

Two things that can move the date earlier

1. Taking possession before completion. If the developer lets you in early - to fit a kitchen, begin snagging, or move in under a "licence to occupy" ahead of legal completion - that possession is substantial performance. The effective date, and the 14-day filing-and-payment window, shift to the day you took the keys rather than the later completion date. This is a known trap for otherwise ordinary buyers; see early occupation before completion.

1. Crossing the 90% payment line. Most purchases pay the balance in a single lump on completion, so this never bites. It can matter on staged-payment contracts - some custom-build, self-build plot and "build-as-you-go" arrangements release money to the developer in tranches. Once cumulative payments reach 90% of the total price, the contract is substantially performed even if legal completion is still months away.

Because the effective date fixes both the filing deadline and the rate table, a purchase that is substantially performed early is taxed under the rules and reliefs in force on that earlier date - a point that matters only if the rates change between exchange and completion.

What the bill itself looks like

Timing decides when you pay; the amount is set by the price and your status at the effective date. On the England residential scale in force from 1 April 2025 - 0% up to £125,000, 2% to £250,000, 5% to £925,000, with first-time-buyer relief giving 0% up to £300,000 then 5% to £500,000 - a new-build works out like this:

Figures from the Homecost stamp duty calculator, England residential rates, checked 14 August 2026. First-time-buyer relief applies only if every buyer is a first-time buyer and the price is £500,000 or less; the home-mover column assumes you are replacing a main residence, not buying an additional property, which carries a 5% surcharge on top. The median new-build sold for £350,000 in 2024 (HM Land Registry).

Your status is judged at the effective date, not at exchange - dwelling status is judged at the effective date explains why that timing point can change the figure.

The practical picture

Off-plan timelines stretch across months, so the useful questions are narrow: when will the effective date fall, and is the 14-day return being handled? For an ordinary reservation-then-completion purchase it is completion day. Early access or staged payments can bring it forward.

Before committing to a new-build area, you can see its wider running cost - mortgage at the current Bank of England quoted rate, council tax and energy alongside the purchase price - with the Homecost postcode tool, for example Milton Keynes (MK9 1AA). The new-build versus resale cost comparison and typical new-build service charges cover the recurring costs a one-off stamp duty figure leaves out.

This is general information about how the rules work, not tax or legal advice. Your conveyancer files the SDLT return and confirms the effective date for your purchase. Speak to a qualified adviser before acting.

Based on 762,281 HM Land Registry "category A" transactions completed in 2024. Browse more buyer guides.