Stamp duty is a tax that is imposed on various legal documents, including property transactions. When buying or selling a property, the sale is not considered legally binding until the exchange of contracts. This exchange signifies that the buyer and seller have agreed to the terms of the sale and are ready to proceed with the purchase.

Many people wonder whether stamp duty is payable on the exchange of contracts. The answer to this question is no. Stamp duty is only payable on the completion of the sale, which is when the property is legally transferred from the seller to the buyer.

However, it is important to note that the exchange of contracts is a crucial step in the property buying process. It is at this point that the buyer typically pays a deposit, which is usually around 10% of the purchase price. This deposit is held by the seller’s solicitor until completion of the sale.

It is also important to remember that if the sale falls through after the exchange of contracts, the deposit may be forfeited. This is why it is important for buyers to ensure that they are completely satisfied with the property and the terms of the sale before exchanging contracts.

In summary, stamp duty is not payable on the exchange of contracts, but it is a crucial step in the property buying process. Buyers should ensure they are completely satisfied with the property and the terms of the sale before exchanging contracts and paying the deposit. Only once the sale has been completed will stamp duty be payable.