Purchased New Build before Stamp Duty Changes announced but property wont be built in time

SDLT_Geek

SSM1994 said:

I was wondering if anybody is in the same boat.. 

Just a bit of background info, me and my partner have been together for 6 years, I'm 30 and she's 27, both work in London earning reasonable salaries, we've lived in a rented 1 bed flat outside of London for the the last 6 years whilst we saved money to buy a property together.

We brought a Bellway New Build back in August 2024 however the property will not be built until Q4 of 2025. 

As first time buyers we wanted to make the most of the nil-rate threshold on stamp duty so we based our search on properties up to £425,000.

Our initial thoughts when the Government announced the stamp duty changes were 'thank god we purchased when we did!' however after a couple of weeks we realised that in fact we're actually going to have to pay the tax.

Our solicitors who were recommended to us by Bellway (mistake we wont be making again any time soon, absolutely useless) haven't provided us with any kind of support on this other than tell us we'll have to pay (Roughly £4,000).

This is money we haven't got and are unable to save/borrow so I'm unsure as to what we are supposed to do. We're unable to pull out of the purchase, not only will we lose our full deposit but also been told we'd have to pay compensation to Bellway for pulling out.

We'll be doing everything we can to raise the money, no holidays, no events, no going out for meals or takeaways etc, definitely going to be a year to forget! 

What also doesn't help is our companies have now also requested we return to the office full time so any savings we make by doing the above is completely lost in train tickets.

I suppose it just hurts a lot as, like most people, we've worked hard, lived within our means and done everything by the book to get us to this point, how is it fair that the Government can change the goalposts?

We've spoken with Bellway about this, we thought the fact we've signed all the documents, exchanged our deposit, basically we're just waiting to receive the keys, this would mean we've already completed so therefore aren't liable to pay the tax, but they've told us we haven't fully completed until the property is fully built and we've received the keys.

Just seems completely unfair, surely this isn't right? 

If anyone has experienced anything similar or is currently going through the same it would be great to hear how you are dealing/ have dealt with this.

It sounds very much as if you have exchanged contracts (is that right?) but not yet completed the purchase, and will not complete the purchase until well after the end of March 2025.

On the basis that you qualify as first time buyers, after that date you will pay £0 of SDLT on the first £300,000, then 5% for the amount of price above that.  For example, if the price is £380,000, then the SDLT would be £4,000.

Because the change in thresholds is the "end of a holiday" (rather than an increase in the rates) you are not protected by transitional provisions, even though you have already exchanged contracts.

The relevant provisions are in the Stamp Duty Land Tax (Temporary Relief) Act 2023.