Stamp Duty for First-Time Buyers: What You Need to Know
Stamp Duty for First-Time Buyers: What You Need to Know
Stamp Duty Land Tax (SDLT) is the tax HMRC charges when you buy property or land in England or Northern Ireland. After the deposit, it is often the biggest bill on completion day, and plenty of first-time buyers leave it out of their savings target.
The thresholds fell on 1 April 2025, so older articles quoting a £425,000 first-time buyer limit are out of date.
How the Standard Bands Work
SDLT works like income tax: each rate applies only to the slice of the price inside that band. The standard rates, if this will be the only home you own, are:
- Up to £125,000: 0%
- £125,001 to £250,000: 2%
- £250,001 to £925,000: 5%
- £925,001 to £1.5 million: 10%
- Above £1.5 million: 12%
On a £300,000 home, a buyer who has owned property before pays nothing on the first £125,000, 2% on the next £125,000 (£2,500) and 5% on the last £50,000 (£2,500). The total bill is £5,000.
First-Time Buyer Relief
If you have never owned a home, in the UK or anywhere else, you can claim first-time buyer relief instead. It replaces the bands above with two simpler ones:
- Up to £300,000: 0%
- £300,001 to £500,000: 5%
Three conditions trip people up. Everyone buying with you must also be a first-time buyer, so if your partner once owned a flat, even an inherited share, you lose the relief on a joint purchase. You must intend to live in the property as your main home. And the price must be £500,000 or less.
Above £500,000 the relief disappears altogether and you pay standard rates on the full price. A £500,000 home costs a first-time buyer £10,000 in stamp duty (5% on £200,000). A £505,000 home costs £15,250, because the standard bands now apply to the whole amount. Spending £5,000 more on the property adds £5,250 to your tax bill.
How Much Could You Save?
On a £400,000 first home:
- Standard buyer: £2,500 on the 2% band plus £7,500 on the 5% band, so £10,000
- First-time buyer: 5% on the £100,000 above £300,000, so £5,000
The saving is £5,000, and it stays at £5,000 anywhere between £300,000 and £500,000. Below £300,000 it is smaller: on a £250,000 home a first-time buyer saves £2,500.
Use our [stamp duty calculator](/stamp-duty-calculator) to work out the bill for the price you have in mind.
The Additional Property Surcharge
Since 31 October 2024, a purchase that leaves you owning more than one residential property costs an extra 5% on top of the standard rates, charged on the whole price. This catches second homes, holiday lets and buy-to-lets.
On a £250,000 buy-to-let, the standard bands come to £2,500 and the surcharge adds 5% of £250,000 (£12,500). The total is £15,000, on a property where a first-time buyer would pay nothing.
The surcharge does not apply to purchases under £40,000. If you are replacing your main home but have not sold the old one by completion, you pay the surcharge at first and can claim it back from HMRC if you sell your previous home within 36 months.
Scotland and Wales
Scotland charges Land and Buildings Transaction Tax (LBTT) instead, with its own first-time buyer relief. Wales charges Land Transaction Tax (LTT), which has no separate first-time buyer relief but a higher starting threshold than England. Check current rates with Revenue Scotland or the Welsh Revenue Authority.
When and How You Pay
The SDLT return and payment are due within 14 days of completion. Your solicitor or conveyancer normally files the return with HMRC and pays the tax from funds you send them before completion. A return is needed even when relief brings the bill to zero.
Tell your solicitor at the start that you are a first-time buyer, and tell them if anyone buying with you has ever owned property. If HMRC later finds the relief was claimed wrongly, it can ask you for the full standard-rate tax plus interest.