In England and Northern Ireland, first-time buyers pay no stamp duty on the first £300,000 of a home, then 5% on anything between £300,001 and £500,000. Buy for a penny over £500,000 and the relief disappears entirely — which costs exactly £5,000 at that point. The maximum you can save is £5,000, and the rules are different in Scotland and completely absent in Wales.
Last reviewed: September 2026. Rates shown are the SDLT thresholds in force since 1 April 2025. Always confirm current figures on GOV.UK before exchanging — this is general information, not tax advice.
First-time buyer stamp duty at a glance
| Portion of purchase price | First-time buyer rate | Standard rate |
|---|---|---|
| Up to £125,000 | 0% | 0% |
| £125,001 – £250,000 | 0% | 2% |
| £250,001 – £300,000 | 0% | 5% |
| £300,001 – £500,000 | 5% | 5% |
| Over £500,000 | Relief lost — standard rates on the whole price | 5% to £925,000, then 10%, then 12% |
How the relief actually works
Stamp Duty Land Tax is charged in slices, not as one percentage of the whole price. You pay each rate only on the portion of the price that falls inside that band. First-time buyer relief does two things: it lifts your 0% band from £125,000 up to £300,000, and it flattens everything between £300,001 and £500,000 to a single 5% rate.
Worked example on a £400,000 flat:
- First £300,000 at 0% = £0
- Remaining £100,000 at 5% = £5,000
- Total: £5,000, against £10,000 for a buyer who is not a first-time buyer
The relief is not automatic in the sense of appearing by magic. It is claimed on the SDLT return your solicitor files, so you must tell them you are a first-time buyer.
The £500,000 cliff edge — the most expensive detail
Unlike the rate bands themselves, the £500,000 limit is not tapered. It is a hard cut-off, and crossing it removes the relief from the entire purchase rather than just the excess.
| Purchase price | You pay as a first-time buyer | Standard buyer pays | Your saving |
|---|---|---|---|
| £200,000 | £0 | £1,500 | £1,500 |
| £250,000 | £0 | £2,500 | £2,500 |
| £300,000 | £0 | £5,000 | £5,000 |
| £350,000 | £2,500 | £7,500 | £5,000 |
| £425,000 | £6,250 | £11,250 | £5,000 |
| £500,000 | £10,000 | £15,000 | £5,000 |
| £500,001 | £15,000 | £15,000 | £0 |
That last row is the point worth remembering: agreeing £505,000 instead of £500,000 costs you the £5,000 extra on the price and £5,000 in lost relief. If you are negotiating anywhere near half a million, holding the price at £500,000 or below is worth roughly £10,000 to you.
Who qualifies as a first-time buyer?
HMRC’s test is stricter than most people assume. To qualify, you must never have owned a “major interest” in a residential property anywhere in the world. That includes:
- Property inherited, even briefly, and even if you never lived in it
- Property owned overseas, including a share in a family home abroad
- A buy-to-let you once held
- A property acquired through divorce settlement
Two rules trip people up most often:
- Joint purchases. Every buyer must be a first-time buyer. If your partner has owned before, the relief is lost on the whole purchase — not halved.
- Trusts and gifts. Being a beneficiary of a trust that holds residential property can disqualify you, depending on the trust’s terms.
Things that do not disqualify you: having rented for years, being named on a tenancy, owning non-residential property such as a garage or land, or having been a guarantor on someone else’s mortgage.
Which properties qualify
- It must be a residential property.
- You must intend to occupy it as your only or main residence — buy-to-let and second homes are excluded.
- The price must be £500,000 or less.
- Shared ownership qualifies, but you must choose carefully: you can either pay SDLT on the full market value up front (a “market value election”) or pay on the share you are buying now and again on later staircasing. The election is irreversible.
- New builds, resale flats and houses all qualify equally. Leasehold and freehold both qualify.
Scotland and Wales are different
Stamp duty is devolved, so the guidance above applies only to England and Northern Ireland.
Scotland — Land and Buildings Transaction Tax (LBTT)
First-time buyer relief raises the nil-rate band to £175,000. Above that, the standard bands apply: 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above. The maximum saving is far smaller than in England — around £600 — but there is no upper price cap that removes the relief entirely.
Wales — Land Transaction Tax (LTT)
There is no first-time buyer relief in Wales. Instead the general nil-rate threshold is higher for everyone at £225,000, with 5% to £400,000 and 7.5% up to £750,000. For a Welsh purchase under £225,000, a first-time buyer and a mover pay the same: nothing.
How and when you pay
- Confirm eligibility early, before you set your budget. Tell your broker and solicitor at the outset.
- Budget the tax as cash. SDLT cannot be added to most mortgages, so it has to come from savings alongside your deposit, survey and legal fees.
- Your solicitor files the SDLT return and claims the relief on your behalf.
- The deadline is 14 days from completion. Late filing attracts penalties and interest.
- Payment is made at completion in practice, from funds you send to your solicitor beforehand.
- Keep the SDLT5 certificate. It is your proof the return was filed and is needed for registration at HM Land Registry.
Common mistakes to avoid
- Assuming a joint purchase still qualifies. One previous owner among the buyers removes the relief for everyone on that transaction.
- Forgetting an overseas or inherited property. HMRC’s test is worldwide and lifetime, and getting it wrong means repaying the relief with penalties.
- Offering just over £500,000. The cliff edge costs £5,000 the moment you cross it.
- Not budgeting the tax as cash. A £400,000 purchase carries a £5,000 bill that must be available on completion day.
- Missing the 14-day deadline because you assumed the solicitor would chase you.
- Choosing the shared-ownership election blind. Paying on full market value up front is usually better if you expect to staircase to 100%; paying as you go is usually better if you do not.
Why the relief matters
For a first-time buyer, £5,000 is rarely spare money. It is typically the difference between completing and not completing — it covers the survey, the searches, the legal fees, the removal van and the first month of furnishing a home. The relief also compresses at the bottom of the market in a useful way: below £300,000 the tax bill is zero, which is precisely the price bracket most first purchases sit in outside London and the South East.
It is worth noting that stamp duty reform is a recurring subject in Budget discussions, and thresholds have moved twice in recent years. Because the tax is charged at the date of completion rather than the date of offer, a change announced mid-purchase can affect what you pay — another reason to confirm the current position on GOV.UK before you exchange.
Expert advice for first-time buyers
- Set your maximum offer with the £500,000 line in mind if you are anywhere near it.
- Ask the estate agent to confirm in writing that the price includes no separate payment for fixtures — artificially splitting the price to duck a threshold is not permitted and HMRC does check.
- If you are buying with someone who has owned before, model both scenarios: buying jointly without relief, versus buying in the first-time buyer’s sole name if affordability allows.
- Get a mortgage decision in principle before you view. If your credit history is not perfect, read our guide to bad credit mortgage options in the UK first, because deposit size affects both your rate and your budget.
Conclusion
First-time buyer stamp duty relief in England and Northern Ireland means £0 tax up to £300,000 and 5% on the slice from £300,001 to £500,000, capping your saving at £5,000 and vanishing completely above half a million. Every buyer on the transaction must be a first-time buyer, the property must be your main home, and the return must be filed within 14 days of completion. In Scotland the equivalent relief is smaller but has no cap; in Wales there is none at all.
More property guides in Real Estate.
Frequently Asked Questions (FAQs)
How much is stamp duty for a first-time buyer in 2026?
Nothing on the first £300,000, then 5% on the portion between £300,001 and £500,000. A £400,000 purchase costs £5,000; a £300,000 purchase costs nothing.
What is the maximum first-time buyer stamp duty saving?
£5,000. That is the full saving on any purchase between £300,000 and £500,000, and it is lost entirely above £500,000.
Do both buyers need to be first-time buyers?
Yes. If either person on the purchase has owned residential property before, anywhere in the world, the relief is lost on the whole transaction.
Does inheriting a property stop me being a first-time buyer?
Yes. Inheriting a major interest in a residential property counts as having owned one, even if you never lived there and sold it immediately.
Can I claim first-time buyer relief on a buy-to-let?
No. The property must be intended as your only or main residence. Buy-to-lets and second homes are excluded and attract the additional-property surcharge instead.
Does the relief apply in Scotland and Wales?
Scotland has its own version under LBTT, raising the nil-rate band to £175,000. Wales has no first-time buyer relief at all, but its general threshold is £225,000 for everyone.
When do I have to pay the stamp duty?
The return must be filed and the tax paid within 14 days of completion. In practice your solicitor collects the money before completion and handles the filing.
Can I add stamp duty to my mortgage?
Generally no. Most lenders will not lend against the tax, so it must be funded from savings alongside your deposit and other purchase costs.
