Stamp duty on new-build homes in London: 2026 rates explained

Current Stamp Duty Land Tax bands for England, first-time buyer relief, the surcharges for additional and overseas buyers, and worked London examples.

By OpenHouse advisors · Updated 18 September 2026

The rates (England, in force since 1 April 2025 — unchanged for 2026)

Stamp Duty Land Tax (SDLT) is charged in bands on the portion of the price in each band. For a standard residential purchase by a UK resident who will own only this property:

0% on the first £125,000
2% on £125,001 to £250,000
5% on £250,001 to £925,000
10% on £925,001 to £1,500,000
12% on anything above £1,500,000

First-time buyer relief

If every buyer is a first-time buyer (never owned residential property anywhere in the world) and the price is £500,000 or less: 0% on the first £300,000 and 5% on the portion from £300,001 to £500,000. Above £500,000 no relief applies and standard rates are used on the whole price.

Surcharges to know

Additional property (buy-to-let or second home): a higher-rates surcharge is added on top of each band.
Non-UK resident buyers: a further 2% surcharge applies.
New-build is taxed exactly like second-hand — there is no special new-build rate. Developer incentives that pay your stamp duty are treated as part of the price for tax purposes.

Worked London examples (standard rate, single home, UK resident)

£450,000 one-bed: 0% on £125,000 + 2% on £125,000 (£2,500) + 5% on £200,000 (£10,000) = £12,500.
£650,000 two-bed: £2,500 + 5% on £400,000 (£20,000) = £22,500.
£1,000,000 three-bed: £2,500 + 5% on £675,000 (£33,750) + 10% on £75,000 (£7,500) = £43,750.
First-time buyer at £450,000: 0% on £300,000 + 5% on £150,000 = £7,500 (a £5,000 saving versus standard rates).

When you pay

SDLT is due within 14 days of completion (not exchange). Your solicitor files the return and pays it from your completion funds. Because it is payable at completion, off-plan buyers pay at the rates in force when they complete, not when they exchange — worth remembering if rates change. Always confirm your own figure with your solicitor or the GOV.UK calculator; this is general information, not tax advice.

Frequently asked questions

Do I pay stamp duty on a new-build?

Yes — new-build homes are taxed under the same SDLT bands as any other residential property. There is no special new-build rate or exemption, though first-time buyer relief applies if you qualify.

How much stamp duty is on a £500,000 new-build in London?

For a standard purchase (UK resident, only property): £2,500 + 5% on £250,000 (£12,500) = £15,000. For a qualifying first-time buyer: 0% on £300,000 + 5% on £200,000 = £10,000.

When is stamp duty paid on an off-plan purchase?

At completion, within 14 days, at whatever rates are in force then — not when you exchange contracts.

If the developer pays my stamp duty, is that tax-free?

No. A developer contribution towards stamp duty is an incentive counted as part of the purchase price for SDLT purposes, so the tax is calculated on the full figure. It still reduces your cash outlay.

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