Stamp Duty

davidtcorner

I have purchased a new build property which I have exchanged contracts on, the completion of the property is July/August, can I use the Substantial Performance rule?
In that, if I pay the developer 90% of the value of the property before the end of the SDLT do I qualify for that date even though I cannot take possession until its fully built.
Thanks 
David 

davidmcn

Merely handing over a bunch of the cash isn't "substantial performance". If you moved in as well, that might be - but I doubt either of these things is going to happen.

Besides, do you really want to hand over 90% of the price and get nothing in return?

AdrianC

I hope none of that 90% is a mortgage lender's money...

SDLT_Geek

davidmcn said:

Merely handing over a bunch of the cash isn't "substantial performance". If you moved in as well, that might be - but I doubt either of these things is going to happen.

Besides, do you really want to hand over 90% of the price and get nothing in return?

The definition of “substantial performance” in Finance Act 2003 s44 for SDLT does include paying the seller the whole or substantially the whole of the price.  HMRC say in guidance that this would usually be met by paying 90% of the price.

I agree with @davimcn that in practice this can rarely happen.

davidmcn

SDLT_Geek said:

davidmcn said:

Merely handing over a bunch of the cash isn't "substantial performance". If you moved in as well, that might be - but I doubt either of these things is going to happen.

Besides, do you really want to hand over 90% of the price and get nothing in return?

The definition of “substantial performance” in Finance Act 2003 s44 for SDLT does include paying the seller the whole or substantially the whole of the price.  HMRC say in guidance that this would usually be met by paying 90% of the price.

I stand corrected. In that case, fine as long as you're (a) a cash purchaser and (b) mental.

SDLT_Geek

davidmcn said:

SDLT_Geek said:

The definition of “substantial performance” in Finance Act 2003 s44 for SDLT does include paying the seller the whole or substantially the whole of the price.  HMRC say in guidance that this would usually be met by paying 90% of the price.

I stand corrected. In that case, fine as long as you're (a) a cash purchaser and (b) mental.

Agreed!  There will be very cases where buyers can take advantage of the “substantial performance” rule to come within the holiday.