The cost of buying your first home extends beyond the price you pay for the property itself.
And one of the biggest potential costs for homebuyers is stamp duty.
For first-time buyers stamp duty can seem complicated, so this guide explains everything you need to know about what it is and what you might have to pay…
What is stamp duty?
Stamp duty is a government tax levied on buyers when they purchase a property or land in England or Northern Ireland.
Stamp duty applies to:
- Freehold properties
- Leasehold properties
- Shared Ownership homes
- Land purchases
Do first-time buyers pay stamp duty?
If you’re buying a property for the first time, you may not have to pay stamp duty.
First-time buyers qualify for stamp duty relief, meaning you’ll pay no tax on the first £300,000 of a property’s purchase price, if the overall price doesn’t exceed £500,000.
That means if you’re buying your first property for less than £300,000, you’ll be exempt from stamp duty completely.
Has the stamp duty holiday ended?
The stamp duty holiday introduced in July 2020 ended in September 2021.
Under the holiday, all buyers, including first timers, were exempt from stamp duty on the first £500,000 of a property’s purchase price.
On October 1, 2021, however, stamp duty rules reverted to what they were prior to July 2020.
This means first-time buyers can claim stamp duty relief on the first £300,000 of a property’s purchase price, up to a maximum price of £500,000.
How much stamp duty will I pay as a first-time buyer?
If you’re buying a property for less than £300,000, you’ll pay no stamp duty as a first-time buyer.
If your first home is costing you between £300,000 and £500,000, you’ll pay 5% of the portion above £300,000 in stamp duty.
For example, if you’re buying your home for £380,000, you would pay 5% of £80,000, which would result in a stamp duty bill of £4,000.
If you’re buying a property costing more than £500,000, first-time buyer relief doesn’t apply, and you would pay stamp duty at standard rates.
First-time buyer stamp duty rates
Portion of purchase price |
FTB stamp duty rate |
£0 - £300,000 |
0% |
£300,001 - £500,000 |
5% |
£500,000 + |
No relief – normal rates apply |
How is first-time buyer stamp duty different?
While first-time buyers can claim stamp duty relief on the first £300,000 of a property’s purchase price, those who have purchased a property before can only claim relief on the first £125,000.
That means first-time buyers can save up to £5,000 compared with existing homeowners.
Purchase price |
FTB stamp duty |
Other buyer stamp duty |
£125,000 |
£0 |
£0 |
£250,000 |
£0 |
£2,500 |
£300,000 |
£0 |
£5,000 |
£400,000 |
£5,000 |
£10,000 |
£500,000 |
£10,000 |
£15,000 |
£600,000 |
£20,000 |
£20,000 |
Am I classed as a first-time buyer?
To be classed as a first-time buyer and claim first-time buyer relief on stamp duty, you must:
- Have never previously purchased a property in the UK or abroad
- Be buying a property that will be your main residence
- Have never inherited or been gifted a property
- Both be classed as first-time buyers if you’re buying with someone else
Will my mortgage affect my stamp duty bill?
The type of mortgage you choose to buy your first home could affect your eligibility for first-time buyer stamp duty relief.
Joint mortgages
If you’re taking out a joint mortgage with another person, both of you must be classed as first-time buyers to claim stamp duty relief
Guarantor mortgages
If your guarantor isn’t named on the title deeds of the property you’re buying, you should be able to claim first-time buyer stamp duty relief
Shared Ownership mortgages
If you’re buying a Shared Ownership property, you can choose to pay full stamp duty up front or just pay on the share you’re buying. If the property’s overall value is less than £500,000, you can claim first-time buyer stamp duty relief
Help to Buy mortgages
You’ll still qualify for first-time buyer stamp duty relief if you’re buying your first home through a Help to Buy equity loan
Gifted deposits
If you’ve been gifted a deposit, perhaps from a parent, you’ll still qualify for first-time buyer stamp duty relief if the giftee isn’t named on the property’s title deeds
How do I pay my stamp duty bill?
If you owe stamp duty on your first property purchase, you have 14 days from the date of completion to pay your bill.
However, your solicitor should make this payment on your behalf as part of their service offering, as well as completing the necessary paperwork.