How much is first time buyer stamp duty?

While saving for a bigger deposit unlocks a long list of advantages for first time buyers and repeat homeowners, giving them access to a greater range of mortgage products with better interest rates, there are other home buying costs to contend with.

Alongside common mortgage fees, Stamp Duty Land Tax (SDLT) is a cost you need to budget for when purchasing a property in the UK. But there’s some great news for first time buyers, the world of Stamp Duty isn’t all it seems…

What exactly is Stamp Duty?

Stamp Duty is a tax that’s applicable across many property transactions, including the purchase of your very first home. The amount due is calculated using your prospective property’s purchase price. 

Stamp Duty rates have changed over the years, and are also influenced by the status of the buyer as well as the number of properties they already own – but more on that later!

So, how is Stamp Duty calculated?

Stamp Duty is determined using a tiered system, meaning different rates apply to different portions of the property purchase price.

Under the most recent rules, SDLT isn’t due on properties sold for less than £250,000. You’ll pay 5% Stamp Duty on the next £675,000, and 10% on the portion from £925,001 to £1.5 million. The remaining amount (i.e. the portion above £1.5 million) is calculated at 12%. If you own other residential properties, you’ll pay additional SDLT on top of this, which currently stands at a rate of 3%.

You can use a Stamp Duty Calculator to determine how much Stamp Duty you’ll have to pay based on the latest legislation.

Are the rates different for first time buyers?

In short, yes. Historically, first time buyers enjoyed a reduced or exempt Stamp Duty rate up to a certain threshold, and these days, the UK Government is more generous than ever!

Currently first time buyers pay no SDLT on residential property purchases up to £425,000, then 5% SDLT on the portion from £425,001 to £625,000. First time buyers purchasing property priced over this threshold will not be eligible for this relief and are subject to standard Stamp Duty rates.

Will the relief for first time buyers last?

It’s important to note that, like any tax, all SDLT rates are subject to change, including the relief applicable to eligible first-time buyers. Here Ideal Home explains just how permanent the latest Stamp Duty rules are:

“Initially the stamp duty shake-up was billed as permanent but since Jeremey Hunt took over the reins as Chancellor, he has imposed a deadline on the changes introduced by Kwarteng of March 2025. After this time the increased threshold of £425,000, the point at which first-time buyers begin paying stamp duty, will be reversed back to £300,000. The threshold for home movers will also be reversed from £250,000 back to £125,000.”

Checking reliable resources for the most up-to-date information or consulting with professionals is what we’d recommend to ensure you can budget realistically for your upcoming first-time purchase.