When you are doing your sums before buying your first home don’t forget to include stamp duty. This tax can add thousands to the price of buying a home, but the good news is first time buyer stamp duty relief could eliminate your tax bill.
If you’re buying a property for the first time in the UK then you may well pay less or no stamp duty thanks to the first time buyer stamp duty relief.
First time buyers in England and Northern Ireland are exempt from stamp duty on properties up to £425,000. For properties costing between £425,001 to £625,000 you’ll pay 5% stamp duty, but only on the value above £425,000. Properties over £500,000 follow standard stamp duty rates.
Stamp Duty, or Stamp Duty Land Tax (SDLT) to give its full name, is the tax levied on the purchase of property and land in England and Northern Ireland. In Wales it is known as Land Transaction Tax (LTT) and in Scotland it’s Land and Buildings Transaction Tax (LBTT). They all amount to the same thing – you have to pay a percentage of the purchase price of your property to the taxman.
First time buyer stamp duty relief is a measure designed by the government to make it easier for people get on the property ladder. As we explain above, if you’re a first time buyer in England or Northern Ireland and you’re buying a home up to £425,000, you do not have to pay stamp duty.
While if the property is worth £425,001 to £625,000 you’ll pay 5% stamp duty on the value above £425,000. For example, if you were paying £500,000 for your first home you would have a £3,750 stamp duty tax bill. That is 5% of the £75,000 above the £425,000 relief cut-off. It’s worth noting that stamp duty is set to change again in April 2025 according to the government’s autumn 2022 budget.
| Purchase price of property | First time buyer stamp duty rates 2023 |
|---|---|
| Up to £425,000 | 0% |
| Over £425,000 to £625,000 | 5% |
| Over £625,000 | Normal stamp duty rates apply |
Buy a home worth more than £625,000 and you cannot claim first time buyer stamp duty relief, even if you are a first time buyer. You’ll pay stamp duty at the normal rate. You can find a full break down of how much you’ll pay in this case in our guide to stamp duty .
If you are buying a property in Scotland then you’ll pay no LBTT if you are a first-time buyer and the property is worth less than £175,000. In Wales there is no stamp duty on properties up to £225,000 for normal purchases. See details on stamp duty rates in Scotland and Wales below.
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Find a mortgageStamp Duty is levied as a percentage of the value of the property you are buying.
If you are buying your first home in Scotland, then you’ll pay no stamp duty (LBTT) if it is worth less than £175,000.
First time buyer stamp duty rates in Scotland are applied as follows:
| Purchase price of the property | LBTT Rate for first-time buyers (for Scotland) |
|---|---|
| Up to £175,000 | 0% |
| £175,001-£250,000 | 2% |
| £250,001-£325,000 | 5% |
| £325,001-£750,000 | 10% |
| £750,001+ | 12% |
Unfortunately, in Wales there is no first time buyer stamp duty relief and you’ll pay the same LTT bill regardless of whether this is your first home or not. But, normal stamp duty does not apply if the purchase price is £225,000 or less. LTT is tiered based on the value of your home, so here’s what you’ll pay:
| Property price | LTT rate |
| Up to £225,000 | 0% |
| £225,001 up to £400,000 | 6% |
| £4001,000 up to £750,000 | 7.5% |
| £750,001 up to £1.5 million | 10% |
| Over £1.5 million | 12% |
To work out exactly how much stamp duty you will pay as a first time buyer, use our stamp duty calculator .
To qualify as a first-time buyer in the taxman’s eyes you must never have owned, or had an interest in, a residential property in the UK or overseas. This includes both freehold and leasehold property.
If you have inherited a property , you are not considered a first time buyer. Since you own the house you inherited, you are no longer classed as a first-time buyer despite the fact you’ve never actually purchased a property.
If your name is on the deeds of another property, even if you don’t own 100% of it, you don’t qualify as a first-time buyer.
If you’re buying a house with another person and one of you is a first time buyer but the other isn’t, you may be wondering if you can get first time buyer stamp duty relief. If you are both going to be named on the deeds of the new property, then unfortunately you won’t qualify for the first time buyer stamp duty relief. The only way you could get around this would be to buy the property only in the name of the person who is a first-time buyer. Please note though that if you are married, or in a civil partnership, you are classified as one unit by the taxman, so you won’t get first-time buyer relief in any circumstances if one of you has already owned a property.
Also, if you go down this path be aware that if you are buying with a mortgage then this will affect how much you can borrow as the affordability calculations will be based on only one person’s income. A mortgage broker could help you work out if that is going to be an option. There will also be legal implications so do seek independent legal advice.
No, you can’t use your Lifetime ISA bonus to pay your stamp duty bill. The bonus must be claimed on your behalf by a solicitor or conveyancer and included with the funds consolidated at the completion of the property transaction.
No. First time buyer stamp duty relief was introduced by the government to reduce the upfront costs of buying your first home. First time buyer stamp duty relief is only applicable if you are buying a property you intend to live in. However, you could instead buy the property to live in and let out other rooms in your home and still get the relief.
Stamp duty is due 30 days after you complete on the purchase of your home. That’s the day you get the keys to your property – find out more about the purchase process with our step-by-step guide to buying a home.
Your solicitor or conveyancer should handle it all for you, submitting a return to HMRC on your behalf, collecting what is owed from you prior to completion then paying the taxman on completion day.
Speak to your solicitor or conveyancer just to make sure they are handling your stamp duty bill. Not got a solicitor? Get instant quotes from rated and regulated conveyancers to help you buy your first home.
If you think you may have to pay stamp duty (double check using our stamp duty calculator) then our complete stamp duty guide should answer any further questions you have.
See our guide to buying your first home where we simplify the essential first steps and what help you can access to enable you to buy your first home. You may also find our guide to first time buyer mortgages a good starting point.
The government is keen to help first time buyers so there are a number of initiatives that could help you save for and then buy your first home.
There are Lifetime ISAs that first-time buyers can use to save for a deposit. A Lifetime ISA, or LISA, is a type of account designed to encourage people to save for their first home or their retirement. You can save up to £4,000 a year. The government will top this up with a 25% bonus, paid monthly.
There are also a number of government schemes that can give you a leg-up onto the housing ladder including Shared Ownership . Find out more about the schemes available with our overview of the government’s first-time buyer schemes .
