Key takeaways
No stamp duty on properties up to £300,000. For properties between £300,001 and £500,000, you'll pay 5% on the portion above £300,000
You must have never owned property anywhere in the world to qualify, and if buying jointly, all parties must be first-time buyers
Properties over £500,000 don't qualify for relief and pay standard rates
Wales has different rules with Land Transaction Tax and no first-time buyer relief
When you’re buying your first home, you may need to budget for Stamp Duty Land Tax (SDLT) – a government tax on property purchases in England. However, as a first-time buyer you’re entitled to significant relief depending on the property price.
Understanding how stamp duty works, what you’re entitled to as a first-time buyer, and when you’ll need to pay it is crucial for budgeting for your purchase, so let’s break it down.
Stamp duty is a tax you pay to HM Revenue and Customs (HMRC) when you buy a property in England worth more than a certain threshold. It’s calculated as a percentage of the property’s purchase price, with different rates applying to different price bands – similar to how income tax works.
You’ll need to pay SDLT whether you’re buying with a mortgage or cash, and it applies to freehold and leasehold properties.
Rates depend on the price of the property you’re purchasing. Some first-time buyers won’t have to pay a penny, while others pay a percentage above a certain amount, and if the property is over a certain price, standard rates will apply.
|
Property price |
SDLT rate 2025 |
|
Up to £300,000 |
0% |
|
£300,001 to £425,000 |
5% |
|
£425,001 to £500,000 |
5% |
|
£500,001 to £625,000 |
Standard rates |
If you're buying a property for £300,000 or less, you'll pay zero stamp duty as a first-time buyer. For properties between £300,001 and £500,000, you'll only pay stamp duty on the portion above £300,000 at a rate of 5%.
However, if you're buying a property over £500,000, you won't qualify for any first-time buyer relief and will pay the standard stamp duty rates that apply to all buyers.
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You’re considered a first-time buyer if you’ve never owned a property anywhere in the world.
This means that if you’ve previously owned any property, even if it was decades ago, inherited, or located overseas, you are not eligible as a first-time buyer and will pay standard SDLT rates.
If you’re buying jointly with a partner, spouse, or friend, all parties must qualify as first-time buyers to be eligible for the relief.
The property you’re purchasing must also be your main residence – you can’t use first-time buyer relief for buy-to-let properties, second homes, or investment purchases.
Stamp duty is paid on completion day – the day you officially become the property owner and get the keys. Your solicitor or conveyancer will handle the payment on your behalf as part of the completion process, so you won’t be paying it directly to HMRC.
Your solicitor should let you know how much stamp duty you owe before completion day. After completion, your solicitor has 14 days to submit the stamp duty return to HMRC and pay the tax.
If you're buying a property in Wales, you'll pay Land Transaction Tax (LTT) instead of Stamp Duty Land Tax. LTT replaced stamp duty in Wales from April 2018 and is collected by the Welsh Revenue Authority.
Wales doesn't offer any first-time buyer relief for LTT. All residential property buyers pay the same rates, with no LTT due on properties up to £225,000 (if you don't own other property), then varying rates on portions above this threshold.
If you already own another residential property, you may need to pay higher rates, unless you're replacing your main residence.
Your solicitor will handle the LTT payment and submission to the Welsh Revenue Authority within 30 days of completion, in the same way they would handle stamp duty in England.
Learn more here: Land Transaction Tax
Yes, you can claim first-time buyer stamp duty relief when buying at auction, as long as you meet all the standard eligibility criteria. The method of purchase doesn't affect your entitlement to relief, and your solicitor will handle the stamp duty payment in the same way.
You pay stamp duty on the full purchase price of the property, not just your individual share, how you split this between joint buyers is up to you, and remember you all need to be first-time buyers to benefit from the relief.
No, first-time buyer relief is only available to individuals buying a property as their main residence. Companies aren't eligible for this relief and will pay standard stamp duty rates plus an additional 3% surcharge.
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