Stamp duty relief when a house builder buys your old home
House-builder part-exchange relief
A house-building company may obtain SDLT relief when it buys an individual’s old home as part of selling that person a new home.
- The old home must have been the person’s only or main home within two years.
- The two sales must be linked.
- Land above the permitted area can leave part of the purchase subject to SDLT.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty relief when a house builder buys your old home
When a house builder buys your old home while selling you a new one, it may not have to pay stamp duty. This can matter where the builder takes your property in part exchange. Relief is not automatic: the linked sales, your occupation and the land sold all matter.
What this rule is about
Part exchange can help a move go ahead when a buyer cannot sell their current home first. Under the law, the company taking that home from them may receive SDLT relief.
Tax belongs to the company, not the person moving. That point is easy to miss. Yet your paperwork and the land around your home may decide whether the company can claim it.
This is not a discount on the stamp duty you pay for the new home. Instead, it is relief for the builder’s purchase of the old one.
What the official source says
Legislation gives full relief where a house-building company buys an individual’s old home and all the required conditions are met. A connected company can also qualify.
- The seller must buy a new home from the house-building company.
- The seller must have lived in the old home as their only or main home at some point in the two years ending on the purchase date.
- The seller must intend to use the new home as their only or main home.
- The two sales must be entered into in return for each other.
- The land bought by the company must not be more than the permitted area.
- The company must be in the business of constructing or adapting homes.
The permitted area normally includes the house and up to 0.5 hectares of garden or grounds. More land can qualify when needed.
Its need for reasonable enjoyment depends on the home’s size and character. That limit is central. A large plot does not automatically prevent relief, but it can change full relief into partial relief.
What this means in practice
When all conditions are met and the land stays within the permitted area, the company’s purchase of your old home is exempt from SDLT. The company needs to consider this when it files its return.
Where there is too much land, relief can still apply in part. The law then treats the excess in a specific way: it compares the market value of the permitted land with the market value of everything sold.
- Keep the old-home sale and new-home purchase documents together.
- Check who the buying company is and whether it is connected with the builder.
- Record how and when you lived in the old home.
- Measure all land included in the sale, not just the garden nearest the house.
- Get a valuation that identifies any value linked to land outside the permitted area.
- Remember that HMRC’s manual says to enter relief code 08 on the SDLT return.
That final point is HMRC’s filing guidance. Legislation provides the relief, and the facts must support it.
How to analyse it
Start with the agreed deal. Do not begin with the label “part exchange”. What matters is the connection between the two sales and the evidence behind it.
- Was the buyer a house-building company, or connected with one, on the relevant date?
- Did that company buy the old home from an individual or individuals?
- Did the same individual or individuals buy a newly built or newly adapted home from that company?
- Was the old home used as the person’s only or main home during the two-year period?
- Was there a real intention to make the new home their only or main home?
- Do the contracts show that each sale was made in return for the other?
- What land passed with the old home, and how much of it is garden or grounds?
- If the plot is large, what evidence shows that a larger area was needed for reasonable enjoyment?
You might think one title means one answer. It does not. A single title can include land with a separate use, while land on separate titles may still form part of the home’s grounds.
Example
For illustration, Priya sells her old home and land to a builder for £800,000. She buys the builder’s new home. She had lived in the old one as her main home.
Both deals are linked. A valuation puts the permitted area at £600,000, including the house and suitable grounds. If the other conditions are met, the builder is treated as paying £200,000: £800,000 less £600,000. Partial relief, rather than full relief, is available.
Why this can be difficult in practice
Often, the hard question is not the house. It is the land around it.
Assess a field’s connection from the facts. It may look like extra land. Equally, calling a large area “garden” will not settle whether it was needed for reasonable enjoyment.
- Do not assume that every acre on the title is permitted land.
- Do not assume that a plot over 0.5 hectares always loses all relief.
- Check whether grazing, farming or another agreement gave someone else rights over part of the land.
- Use records from the time of the sale, rather than a later explanation prepared for tax purposes.
- Make sure the seller’s evidence supports both past occupation and the intended move into the new home.
If you only remember one thing, make it this: the relief depends on a linked move and the real character and extent of the land sold.
Key takeaways
- A builder can obtain SDLT relief when it takes your old home in a linked move.
- You must have used the old home as your only or main home within the previous two years.
- Extra land can reduce the relief, so plans, use records and valuation evidence matter.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 6A para 1 — relief for house-builder buying a customer’s old home (provision not found on legislation.gov.uk)
- FA 2003 Schedule 6A para 7 — meaning of new home and permitted land area (provision not found on legislation.gov.uk)
- FA 2003 section 117 — meaning of a major freehold or leasehold interest
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Whether extra land is needed for the reasonable enjoyment of a home depends on the facts, including the home’s size and character.
- A large garden, field, paddock, woodland or separately used parcel will need careful evidence. Size alone does not settle the point.
- Intention to live in the new home and whether the two deals are truly linked are factual questions.
- The supplied statutory text records changes known to be in force by 17 November 2025. A transaction after that date needs a current-law check.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- Signed contracts, transfers and completion statements for both sales — whether the old-home sale and new-home purchase were linked
- The Land Registry title and filed plan for every parcel sold — the land included with the old home and its legal boundaries
- A measured site plan or survey showing the total area — whether the land exceeds 0.5 hectares and where any excess lies
- A valuation report separating the home, permitted land and extra land — the market values needed if only partial relief is available
- Council tax records, utility bills, electoral-roll entries and dated correspondence — whether the seller used the old home as their main home
- The new-home reservation, sale contract, transfer and mortgage papers — that the seller bought a qualifying new home from the company
- Dated aerial photographs, site photographs and maps — how gardens, fields, access and boundaries looked at the relevant time
- Planning history, conditions and lawful-use records — whether parts of the land had a separate permitted or practical use
- Grazing, farming, forestry or other land-use agreements — whether another person used or controlled part of the land
- Company accounts, project records and marketing material — whether the buyer carried on the required house-building business
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Stamp duty relief when a house builder buys your old home [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 6A para 1 - relief for house-builder buying a customer's old home https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/1/2025-11-17 - FA 2003 Schedule 6A para 7 - meaning of new home and permitted land area https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/7/2025-11-17 - FA 2003 section 117 - meaning of a major freehold or leasehold interest https://www.legislation.gov.uk/ukpga/2003/14/section/117/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21020 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether extra land is needed for the reasonable enjoyment of a home depends on the facts, including the home's size and character. - A large garden, field, paddock, woodland or separately used parcel will need careful evidence. Size alone does not settle the point. - Intention to live in the new home and whether the two deals are truly linked are factual questions. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty relief when a house builder buys your old home
Search Land Tax Advice with Google
