Stamp Duty: a first-time buyers guide

Working out the costs involved with buying your first home can be a headache – not least, Stamp Duty. So what exactly is Stamp Duty? And do first-time buyers have to pay it? Find out what you need to know in our Stamp Duty guide for first-time buyers.

Working out the costs involved with buying your first home can be a headache – not least, Stamp Duty. So what exactly is Stamp Duty? And do first-time buyers have to pay it? Find out what you need to know in our Stamp Duty guide for first-time buyers.

Daniel Evans
Mortgages expert
minute read
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Posted 30 SEPTEMBER 2021

First-time buyers and Stamp Duty

Buying your first home is exciting, but it can also be overwhelming – especially when you consider all the costs involved. One of these is the dreaded Stamp Duty Land Tax (SDLT).

The good news is, if you’re buying your first home in England or Northern Ireland and it’s worth less than £300,000, you won’t have to pay a penny in Stamp Duty.

What is Stamp Duty?

Stamp Duty is a government land tax that you need to pay when you buy a property over a certain amount in England and Northern Ireland. Although Scotland and Wales no longer have SDLT, they have a similar tax:

You’ll need to pay SDLT if you buy a property over a certain amount – this is known as the SDLT threshold.

The SDLT threshold for first-time buyers in England and Northern Ireland is £300,000. This means you won’t pay Stamp Duty if your first home costs less than this.

In Scotland and Wales, the thresholds for first-time buyers are different:

  • In Scotland, you won’t pay LBTT on the first £175,000
  • In Wales, you won’t pay LTT on the first £180,000

Did you know? 

Stamp Duty is calculated as a percentage of the property purchase price, not as a percentage of your mortgage.

Your home may be repossessed if you do not keep up with repayments on your mortgage.

Do first-time buyers pay Stamp Duty?

First-time buyers get a discount – or relief – on Stamp Duty when buying their first home.

Whether you’ll pay little or no tax at all depends on the purchase price of the property you’re buying.

How much is first-time buyers’ Stamp Duty?

From 1 July 2021, Stamp Duty rates for first-time buyers are:

Property price

Stamp Duty Rate

Up to £300,000


£300,001 - £500,000


If the property costs more than £500,000, you’ll be charged the same rates as existing homeowners who are buying their next property. That’s:

  • 5% on properties up to £925,000
  • 10% on properties from £925,001 to £1.5 million
  • 12% on properties over £1.5 million

If your first home is over the SDLT threshold, you’ll be relieved to know you only have to pay the Stamp Duty rate on the remaining portion up to the next Stamp Duty Tax band.

For example, if your first home costs £325,000, the SDLT will be:

  • 0% on the first £300,000
  • 5% on the remaining portion up to £500,000 – in this case, £25,000
  • Total SDLT to pay = £1,250

Use the HMRC stamp duty calculator to work out how much SDLT you may need to pay. Don’t forget to factor in stamp duty costs when working out how much you can afford to pay for your new home.

Who is considered a first-time buyer?

A first-time buyer is someone who is buying a house or flat as their main residence and has never owned a property before in the UK or abroad.

If you’re buying a property with someone else, like your spouse or partner, you both have to qualify as first-time buyers to get the Stamp Duty discount.

If only one of you is a first-time buyer, you may still qualify for the Stamp Duty discount – but only the first-time buyer can be named on the mortgage application and only their income will be taken into account. This means you might not be able to borrow as much or you may have to pay a higher interest rate.

What will I pay if I’m not considered a first-time buyer?

If you’re an existing homeowner looking to buy your next property, you’ll pay the following in Stamp Duty:

  • 0% on a property up to £125,000
  • 2% on a property from £125,001 to £250,000
  • 5% on a property from £250,001 to £925,000
  • 10% on a property from £925,000 to £1.5 million
  • 12% above £1.5 million

Frequently asked questions

How do I pay Stamp Duty?

You have to pay any Stamp Duty owed within 14 days of completing the purchase of your new home. Even if you’re under the SDLT threshold and don’t have to pay anything, an SDLT return still needs to be completed and sent to HMRC within this time.

Usually your solicitor or conveyancer will do this for you, then add the amount to their fees. As you’re a first-time buyer, they should also claim any discount you’re due. If you’re not using a solicitor, you can file the return and take care of payment yourself.

Make sure you get this done within 14 days of completion, or you could be charged a penalty of up to £200 as well as interest on the amount you owe.

Are there any Stamp Duty exemptions?

Even if the property is worth more than £300,000, there’s a few occasions when you won’t have to pay any Stamp Duty or even file a return. For example, if:

  • the property is left to you in a will
  • you don’t actually exchange payment for the property
  • the property is transferred to you as part of a divorce settlement.

Do we pay Stamp Duty together as a couple?

When it comes to paying Stamp Duty, the person who owns the house is responsible. If the house is joint owned by you and your spouse or civil partner, you count as a single person for Stamp Duty and will only be charged one SDLT fee.

Do I have to pay Stamp Duty if I buy a home through the Shared Ownership Scheme?

If you buy your first home through the government’s Shared Ownership Scheme and it’s valued above the SDLT threshold, you might not need to pay Stamp Duty until your share reaches 80%.

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