First-time buyers in England and Northern Ireland pay no Stamp Duty Land Tax on the first £300,000 of a property’s purchase price and 5% on the portion between £300,001 and £500,000. A first-time buyer purchasing a home at £300,000 or below pays nothing. At £450,000 the bill is £7,500. If the price exceeds £500,000, the relief is lost entirely and the standard home-mover rates apply to the full price. Use the stamp duty calculator to calculate the exact figure.
The first-time buyer rates
| Purchase price portion | Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
| Above £500,000 | Relief lost; standard rates apply to the full price |
Relief applies only to residential property in England and Northern Ireland purchased by individuals who have never owned a freehold or leasehold interest in a residential property anywhere in the world. Both buyers in a joint purchase must qualify, so a couple where one partner already owns property does not benefit from the relief.
Scotland and Wales have their own first-time buyer schemes with different thresholds. Scotland charges Land and Buildings Transaction Tax with a nil band up to £175,000 for qualifying first-time buyers. Wales charges Land Transaction Tax with no dedicated first-time buyer relief.
Worked examples
Purchase at £250,000
The entire price falls within the 0% band. No stamp duty is payable. Total cost: £0.
A standard home mover at the same price would pay: 0% on the first £125,000, then 2% on the next £125,000, totalling £2,500.
Purchase at £350,000
The first £300,000 is charged at 0%. The remaining £50,000 is charged at 5%. Stamp duty: £2,500.
A standard home mover at the same price: 0% on £125,000, 2% on £125,000 (£2,500), 5% on £100,000 (£5,000). Total: £7,500. The first-time buyer saves £5,000.
Purchase at £450,000
The first £300,000 at 0% and the remaining £150,000 at 5%. Stamp duty: £7,500.
A standard home mover at £450,000: 0% on £125,000, 2% on £125,000 (£2,500), 5% on £200,000 (£10,000). Total: £12,500. The first-time buyer saves £5,000.
Purchase at £500,001
Relief is lost completely. The buyer pays standard rates on the full price: 0% on £125,000, 2% on £125,000 (£2,500), 5% on £250,001 (£12,500). Total: £15,000.
The jump from £500,000 to £500,001 adds £7,500 to the tax bill because the entire relief disappears. Buyers near this boundary should consider whether negotiating the price below £500,000 delivers a net saving, as the stamp duty calculator can test.
Who counts as a first-time buyer
Under HMRC’s definition, a first-time buyer is an individual who has never owned a freehold or leasehold interest in a dwelling anywhere in the world. The interest does not need to have been purchased. Inheriting a property, receiving one as a gift, or owning a share through a trust all disqualify the buyer.
Joint purchasers must each meet the definition. If one buyer in a couple has previously owned a property, the first-time buyer relief cannot be claimed on the purchase, even if the other buyer has never owned anything.
A buyer who previously owned a residential property abroad is not a first-time buyer under these rules, regardless of whether the overseas property was sold. The test looks at whether the individual has ever held an interest, not whether they currently hold one.
Shared ownership
First-time buyers purchasing through a shared ownership scheme can claim the relief if they elect to pay stamp duty on the full market value of the property (rather than only on their share). This election must be made at the time of purchase. The relief then applies to the full market value, so if the market value is below £500,000, the first-time buyer bands apply to it.
Where the buyer pays stamp duty only on the value of the share being purchased (the staircasing option), the first-time buyer relief does not apply. The choice between the two methods depends on the share price, the market value and whether the buyer expects to staircase to full ownership. The first-time buyer stamp duty calculator runs both scenarios.
What to do if you pay too much
If a buyer qualifies for first-time buyer relief but the conveyancer submitted the return without claiming it, or if relief was incorrectly denied, HMRC allows an amendment to the return within 12 months of the filing date. This can be done through the SDLT online service or by writing to HMRC’s SDLT office with the Unique Transaction Reference Number from the original return.
Information, not financial advice. Rates and relief conditions are those published on gov.uk for England and Northern Ireland. Scotland and Wales operate separate property tax systems with different rates and thresholds. Check your own circumstances before acting.