When you’re getting ready to buy your first home, knowing how much it will cost can help you budget accordingly. On top of your deposit and mortgage, there are other costs to consider – stamp duty is one of them. The good news is that as a first time buyer, you could benefit from a stamp duty exemption or relief.
We know stamp duty can be a confusing subject, so we’re breaking it down to help you understand what it is, how it’s calculated and when it applies to first time buyers.
What is stamp duty?
Stamp duty, officially known as Stamp Duty Land Tax (SDLT), is the tax payable to the government when you buy a property or land in England and Northern Ireland (Scotland and Wales have their own systems).
The amount of stamp duty you pay depends on the purchase price and whether you’re eligible for relief or an exemption. Different rules apply depending on whether you’re a first time buyer, buying an additional property or not a UK resident.
Stamp duty is charged on a progressive basis, meaning you pay the tax at different rates on different portions of a property’s value. The current stamp duty rates came into effect on 1 April 2025.
You must pay stamp duty within 14 days of completion. Your conveyancer or solicitor will usually file the tax return on your behalf and add it to their fees. If this isn’t included in their service, you can file a return and pay it yourself. Make sure to pay any stamp duty due within 14 days, as you could be charged penalties and interest for late payment.
What are the normal stamp duty rates?
No stamp duty is charged on the first £125,000 of the purchase price, with a rate of 2% charged on the The normal rates for residential properties are:
- No stamp duty on purchases up to £125,000
- 2% on the portion from £125,001 to £250,000
- 5% on the portion from £250,001 to £925,000
- 10% on the portion from £925,001 to £1.5 million
- 12% on purchases above £1.5 million
However, first time buyers are subject to different thresholds.
What is the first time buyer stamp duty exemption?
If you’re buying your first home, you may be exempt from paying stamp duty. You don’t have to pay the tax on the first £300,000 of the property purchase if the total price does not exceed £500,000.
So, unlike regular buyers who must pay tax on property purchases costing more than £125,000, stamp duty doesn’t apply to first time buyers until £300,000.
What are the stamp duty rates for first time buyers?
The stamp duty rates for first time buyers are:
- No stamp duty on purchases up to £300,000
- 5% stamp duty on the portion from £300,001 to £500,000
- If the price is over £500,000, you cannot claim the relief and must pay the normal rates, as detailed above.
For example, a first time buyer purchasing a property costing £250,000 would not pay any stamp duty at all.
A first time buyer purchasing a home for £350,000 would only pay the 5% stamp duty on the £50,000 over the £300,000 threshold. So, they would pay 5% of £50,000, which equals £2,500.
If you’re buying a home with someone else, you must both qualify as first time buyers to be eligible for the exemption or relief.
You can use HMRC’s stamp duty calculator to work out exactly how much you will have to pay.
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