Finance

Do first-time buyers pay stamp duty?


BUYING your first home is costly enough as it is, but depending on the price, you may have to pay stamp duty on top.

It’s an expensive up-front payment for first-time buyers and it may be difficult to avoid.

We explain what stamp duty is and how much you have to pay

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We explain what stamp duty is and how much you have to payCredit: Alamy

However the exact amount a buyer might have to shell out depends on the price and type of property.

You only pay when you hit a certain threshold, which is currently £425,000.

It was originally less than this, as we explain below.

If you buy a property for less than this, then you don’t have to pay the tax as a first-time buyer. 

Rules are changing again in 2025 though – below we explain all.

What is stamp duty and who has to pay?

Stamp duty land tax (SDLT) is a lump sum payment you have to make when purchasing a property over a certain threshold.

Home buyers always pay the stamp duty, not the seller.

This is often done through a solicitor on your behalf as part of the buying process.

Home buyers have 14 days from the date of purchasing a property to file a return to HMRC with any stamp duty due.

What are the rules for first-time buyers?

Not everyone pays the same amount of stamp duty.

If you are a first-time buyer you can get a discount if the following applies to you: 

  • You, and anyone else you’re buying with, are first-time buyers
  • The purchase price is £625,000 or less

You pay the tax when you:

The rate a buyer has to pay depends on the price, type of property and whether or not they already own a home.

How have the rules changed recently?

Since September 2022, first-time buyers have not had to pay any stamp duty on homes costing less than £425,000.

They only have to pay it on properties costing more than this.

This figure was previously £300,000 but was increased by the then Chancellor Kwasi Kwarteng.

The maximum value of a property on which a first-time buyer’s relief can be claimed also increased from £500,000 to £625,000.

Under the previous system, no stamp duty was paid on the first £125,000 of all property purchases but the government has doubled that to £250,000.

The change in thresholds will end on March 31, 2025.

Did the rules change during Covid?

The government previously introduced a stamp duty holiday for homes worth up to £500,000 during the Covid pandemic.

The aim was to give buyers a break and to buzz some energy back into the property market.

Stamp duty then went back to its previous rules in September 2021. 





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