SDLT and stamp duty on off-plan homes bought together
Off-plan SDLT rule
For the former relief for buying more than one home at once, an unbuilt off-plan home could count if the contract required its construction or adaptation.
- The historic rule depended on the contract terms and timing.
- Planning permission alone did not meet the test.
- HMRC says the relief was abolished from 1 June 2024, subject to transitional rules.
Scroll down for the full analysis.
Read the original guidance here:
SDLT and stamp duty on off-plan homes bought together
Off-plan home purchases once created a particular stamp duty issue. For the old relief available when more than one home was bought at the same time, a home did not need to have been built already. That result depended on the contract requiring the building work. Planning permission for a plot, by itself, was insufficient.
What this rule is about
This historic SDLT rule concerned off-plan purchases. It addressed the timing issue that arises when a binding deal for a future home is made before construction has started.
Calling an unbuilt structure a home is normally difficult. The former rule ensured that this point alone did not prevent the old multiple dwellings relief from applying.
The distinction may appear narrow. For a purchase involving several homes, however, it could alter the tax outcome.
What the official source says
HMRC’s manual explains that the former relief was abolished for purchases completing, or being substantially performed, on or after 1 June 2024. Transitional rules may still be relevant in particular cases.
Where an earlier off-plan purchase qualified, historic law treated the principal subject matter acquired as including an interest in a home. That remained so although construction or adaptation had not started.
- There had to be a contract to buy a building, or part of one.
- The contract had to require it to be built or adapted for use as a home.
- The contract had to be substantially performed before that work began.
- That substantial performance had to set the SDLT effective date under a relevant statutory rule.
- For this purpose, a contract could include an agreement that was not a lease.
In this context, “substantially performed” carries a technical meaning, and it may arise before formal completion where the buyer takes possession or pays a substantial amount. The facts are decisive.
Above all, HMRC distinguishes clearly between two types of arrangement. A contract under which the seller must build homes may come within this historic rule. By contrast, the purchase of bare land does not meet that description merely because planning permission exists and homes are intended, if no building obligation binds anyone.
What this means in practice
For a purchase before the abolition date, the question is not simply, “Was there a finished house?” Instead ask: “What did the contract make the seller do?”
Under the former rule, a planned home could qualify where the written agreement required construction or adaptation. A buyer’s own later building intention did not have the same effect.
- Read the building clauses, not just the sale title.
- Check whether the seller had a real duty to build or adapt.
- Find the date work actually began.
- Check whether possession was handed over before completion.
- Check payments made before completion.
- Consider transitional rules if events fell around 1 June 2024.
Not every off-plan transaction qualified for the old relief. Rather, an unfinished home was not automatically excluded when the specified conditions were satisfied.
How to analyse it
Begin with the dates. The relief is not generally available for purchases that completed or were substantially performed from 1 June 2024. In an earlier case, consider the contract and timeline step by step.
- Identify every home or plot covered by the purchase.
- Check the date of completion.
- Check whether the contract was substantially performed earlier.
- Work out why that earlier event set the effective date.
- Read the contract for a binding construction or adaptation duty.
- Establish whether work had begun by the substantial-performance date.
- Separate a building obligation from planning permission or a buyer’s future plans.
- Check whether linked purchases affect the transitional position.
Where the contract is ambiguous, the way it operated in practice may help establish what the parties truly agreed. Later intentions cannot alter a transaction that sold land only.
Example
For illustration, Nia agrees to pay £500,000 for two new flats. The developer is required by her contract to construct both flats. Before work starts, Nia pays a substantial amount, causing the contract to be substantially performed. Because the contract requires construction and substantial performance occurs before work begins, the historic off-plan rule could treat the planned flats as homes for the former relief test. That is the potential result.
Now change one fact. Nia buys a £500,000 plot with permission for two flats, while the seller has no obligation to construct them and Nia intends to employ builders later. This is different. HMRC’s manual treats those facts as a different situation, meaning that the off-plan rule does not apply. The rule is unavailable.
Why this can be difficult in practice
This issue often lies in the gap between the contract and the building site. A brochure may refer to “new homes”, even though the legal agreement transfers land only. The legal agreement is likely to carry much greater weight.
Planning permission may seem conclusive. It is not. Permission permits construction; it does not necessarily require anybody to carry it out.
- A marketing description may not match the contract terms.
- Construction can begin at a disputed point, such as site preparation.
- A payment may or may not be substantial in the statutory sense.
- Possession before completion may change the effective date.
- Linked contracts can make the transitional analysis harder.
- The former relief’s abolition means timing is now central.
Key takeaways
- An unfinished off-plan home could count under the former SDLT relief.
- The contract needed to require construction or adaptation before work began.
- Planning permission and an intention to build were not enough on their own.
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 6B para 7 — treating certain unbuilt homes as homes
- FA 2003 section 44 — when a contract is substantially performed
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
- The transitional rules may matter where contracts, linked purchases, substantial performance and completion fall on different dates.
- Whether a contract requires construction or adaptation depends on its terms and the facts, not simply on its label or planning status.
- Whether a payment or taking possession amounts to substantial performance can be fact-sensitive.
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.
- The signed contract and any variations
- The completion date and any earlier date of possession or payment
- Evidence of when construction or adaptation began
- Planning papers and building obligations
- Details of any linked purchases
- The documents used for any historic stamp duty return or relief claim
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 SDLT and stamp duty on off-plan homes bought together [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 6B para 7 - treating certain unbuilt homes as homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/7/2025-11-17 - FA 2003 section 44 - when a contract is substantially performed https://www.legislation.gov.uk/ukpga/2003/14/section/44/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm29960 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's 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 - The transitional rules may matter where contracts, linked purchases, substantial performance and completion fall on different dates. - Whether a contract requires construction or adaptation depends on its terms and the facts, not simply on its label or planning status. - Whether a payment or taking possession amounts to substantial performance can be fact-sensitive. 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: SDLT and stamp duty on off-plan homes bought together
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