Stamp Duty on part-exchange

skintlass

On a part-exchange with a builders do both the builder and the seller have to pay stamp duty on both houses. e.g sellers house bought by builders at > £175k does the builder pay stamp duty on that house. Seller then buys new-build from builder, also at above stamp duty threshold so seller then pays stamp duty on new build purchase price - I'm guessing this is the case but wanted to confirm it.

princessamy86

Yes you will both need to pay stamp duty on your transaction, however, if both properties are very close to the threshold it might be mutually beneficial to pay a slightly lower price?

Graham1979

The purchaser will be liable for stamp duty on the full value of the new property they are purchasing (e.g. if you buy @ £250k and part ex for £175k off then you are still liable for stamp duty on the £250k, not the difference).

I'm pretty sure that a developer taking a property as part exchange is exempt from stamp duty on the part-ex regardless of value.

Doozergirl

Graham is correct. If a property is part-exchanged for a new build and the developer plans to sell the part-exchanged property on, then the developer does not pay stamp duty.

The person buying the new build must pay the stamp duty on the house they are buying.

If they were part exchanging their house for a larger property, not new build, then both parties would pay Stamp Duty.