The information in this guide relates to properties located within England, Northen Ireland and Wales. Schemes differ for properties in Scotland.
Stamp duty for first time buyers
Officially called Stamp Duty Land Tax (SDLT), stamp duty applies to most property purchases in England and Northern Ireland. Scotland and Wales have different systems. Stamp duty can seem confusing when it’s your first purchase. But there are different rules and stamp duty exemptions for first time buyers. Read on to see how it applies and what you need to be aware of.
Do first time buyers pay stamp duty?
You’ll only need to pay stamp duty if the property value is above a certain amount. For first time buyers, the threshold for paying stamp duty is much higher due to the government’s relief scheme.
Minimum property price
Maximum property price
Stamp Duty rate
You only pay tax on the amount above the threshold. If you were to buy a home for £429,000, as a first time buyer, you’d only pay 5% tax on the £4,000 that falls above the £425,000 threshold. Find more information about tax rates for first time buyers.
Stamp Duty differences in Northern Ireland
Are you a first time buyer?
You’ll need to meet certain criteria to qualify for stamp duty discounts for first time buyers. Relief is only available if:
- The home will be your only or main residence
- You haven’t previously owned a freehold residential property
- You don’t have an existing leasehold interest
- You’ve never owned a foreign property or inherited one.
Do both people need to be first time buyers?
Buying a home with another person can be an effective way to get on the property ladder. But to benefit from the stamp duty relief scheme, everyone included in the application needs to be classed as a first time buyer.
Standard stamp duty rates will apply if you’re purchasing your first home but the other person isn't.
Stamp duty if you’re not a UK resident
Things are a little different for first time buyers and stamp duty if you’re not classed as a UK resident. You’ll need to have been in the UK for 183 days in the 12 months leading up to your purchase.
If you don’t meet this criteria, you’ll generally face a 2% surcharge on your stamp duty rate – whether you’re a first time buyer or not.
Information on applying
Stamp duty in Wales
There is no stamp duty relief for first time buyers in Wales. Stamp Duty Land Tax in Wales is known as Land Transaction Tax from 1 April 2018 and is paid when you purchase a property over the value of £225,000. The amount you pay will depend on if the property is residential or non-residential and there are some reliefs. You can find more information by going to the Welsh government website on Land Transaction Tax.
Mixed-use property rates for first time buyer
As the name suggests, mixed-use properties aren’t strictly residential or non-residential. This could be a flat above a shop or an apartment joined to a GP’s surgery. Different stamp duty rates apply to this property category. As a result, first time buyers can’t qualify for their usual relief.
The thresholds for leasehold properties are slightly different but for freehold sales, the stamp duty rates are:
- 0% for properties up to £150,000
- 2% for properties between £150,001 and £250,000
- 5% above £250,000.
How do first time buyers pay stamp duty?
Even if you don’t need to pay stamp duty, you’ll still need to file a stamp duty return. This is normally handled by the solicitor or conveyancer helping you with the purchase. If you owe anything, first time buyers can make a stamp duty payment like anyone else.
The standard process is:
- Send a payment to HM Revenue and Customs (HMRC) within 14 days of your completion date
- Use the 11-character transaction reference you’re given
- Choose a payment method that suits you. This can include online payments, bank transfers and cheques.
You could face financial penalties if you file your stamp duty late. The following fixed penalties can apply:
- £100 – up to three months late
- £200 – more than three months late.