Guide To Stamp Duty For First-Time Buyers
Purchasing your first home is an exciting time. It can mean your first sense of freedom, spreading your wings, or your first step toward a new future.
If you’re at the stage where you’re looking for a mortgage then we have a page dedicated to first time buyers mortgages that you may find useful.
As a first-time buyer, you’ll have plenty running through your mind with house viewings, budgeting and solicitors. Are you waiting for someone else? Are you supposed to be doing something? Have you forgotten something? At The Cumberland, we understand that it can be a challenging time, which is why we have real people on hand to help with your mortgage application. We also have our ‘Mortgage Hub’, an online resource that provides helpful tips and important things to remember.
One of the things you may have heard of, but might now know much about, is Stamp Duty Land Tax (SDLT) or Stamp Duty for short. It’s important that you consider Stamp Duty because it can affect how much money you need upfront when buying your home.
Stamp duty is a tax that homebuyers need to pay when purchasing a property. The amount depends on the price of the home and whether you are a first-time buyer, moving home or purchasing a second property. Some buyers qualify for exemptions known as stamp duty relief.
The rules are different depending on where in the UK you buy a property:
In England and Northern Ireland it is: Stamp Duty Land Tax (SDLT)
In Scotland the equivalent is: Land & Buildings Transaction Tax (LBTT)
In Wales it is: Land Transaction Tax (LTT)
(The article uses rates and regulations applying to England and Northern Ireland unless stated otherwise and includes the changes to Stamp Duty thresholds that applied from April 1st 2025.)
Who Classifies as a First Time Buyer?
The UK government’s definition of a first time buyer is:
“a purchaser must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world.”
A more in-depth description of a first time buyer can be found on the government website for those whose situation may be more complicated. As always if unsure, we would suggest you take the appropriate advice before committing to a purchase.
Do First Time Buyers Pay Stamp Duty in the UK?
The rules are different depending on which country of the UK that you are purchasing in. In England, Northern Ireland and Scotland you may need to pay Stamp Duty but as a first time buyer you could be eligible for a reduced or zero rate, depending on property value, as a relief is available. In Wales there is no stamp duty relief for first time buyers (they are treated as any other buyer).
Who is Eligible for First Time Buyer Stamp Duty Relief?
- You must qualify as a first time buyer as described above.
- If purchasing with another person (or persons), all people making the purchase must be eligible as first time buyers under the same rule in order for the purchase to qualify.
- If you are married or in a civil partnership and both people are being named on the mortgage, then you will be classed as one entity and must both meet the first time buyer criteria.
- You must be purchasing your first home, and anyone purchasing alongside you must also be purchasing their first home. This means that you can’t have owned, or joint-owned another property (or a majority share of another property), anywhere in the world.
- You must be buying the property with the intent to live in it (i.e. you can’t be purchasing with the intention of renting the property out).
The above information applies to England and Northern Ireland.
Residents of Scotland should can view further information on the Revenue Scotland website.
Wales does not offer first time buyer relief, however no property purchase tax is paid on any purchase below £225,000.
Non-UK Residents:
If you’re not present in the UK for at least 183 days (6 months) during the 12 months before your purchase, you are ‘not a UK resident’ for the purposes of SDLT and you should take independent legal advice on the rate that you will need to pay.
It is worth taking the appropriate advice if you have the option of buying as a first time buyer alone, or as a joint purchase where one participant is not a first time buyer. Our mortgage calculator is a useful tool for calculating the amount you may be able to borrow as a sole purchaser or with a second person. Please note that it provides an indicative example only and an appointment with us is required in order to gain an Agreement in Principle.
How Much is Stamp Duty for First Time Buyers in 2025?
From April 1st 2025, the rates of SDLT for first time buyers are as follows:
No SDLT up to £300,000
5% on the portion from £300,001 to £500,000
If the purchase price is over £500,000 then you are not eligible for first time buyer relief and must follow the Stamp Duty rates for people who have bought a home before.
Example:
You are a first-time buyer and purchase a property for £400,000.
The SDLT you owe will be calculated as:
0% on the first £300,000 = £0
5% on the remaining £100,000 = £5,000
The total SDLT that you would pay on this purchase would be £5,000
The above rates apply to England and Northern Ireland.
Detailed information for Scotland and Wales can be found on the relevant websites, however as an initial guide:
In Scotland:
Land & Buildings Transaction Tax (LBTT) only applies to properties over £175k for first time buyers.
In Wales:
There is no specific first time buyer relief but tax only applies once the purchase price is over £225k.
Stamp Duty For First Time Buyers FAQs
There is no official way to add the Stamp Duty to your mortgage.
However, depending on your financial situation and the deposit you have, you might choose to put down a smaller deposit and use the extra money to cover your Stamp Duty. Keep in mind that a smaller deposit means borrowing more which could impact your mortgage offer as lenders assess affordability and the monthly payments/interest you are charged may be higher as you have increased the size of your loan. This will potentially affect the amount that you will pay back over the lifetime of the loan.
Before making this decision, its best to speak with a mortgage adviser to understand the options and potential consequences.
If you claim first time buyer relief by mistake, you’ll need to correct your return to avoid penalties. The government website provides guidance on how to amend your return. If a solicitor or conveyancer submitted the return on your behalf, they may be able to assist you.
If you believe that you have overpaid Stamp Duty then you may be eligible for a refund. Conditions will apply, but you can find details on the government website.
SDLT must be paid within 14 days of the effective date of the transaction and your solicitor or conveyancer would typically handle this for you. It’s important for you to discuss this with them and ensure they have all the information as it is your responsibility to ensure the 14 day deadline is met.
An SDLT return is required even if the purchaser does not need to pay any tax. Again, your solicitor or conveyancer will typically handle this on your behalf.
Please note: In Scotland and Wales the deadline for returns is 30 days.
*Information in this article is based on rates which were correct as of April 1st 2025 but are subject to change.