Guide · 4 minute read

How much stamp duty do first-time buyers pay?

Nothing on the first £300,000, then 5% on the slice between £300,000 and £500,000. Above £500,000 the relief disappears completely and you pay standard rates on the whole price, which is the part that catches people out.

The first-time buyer rates

Stamp Duty Land Tax is tiered, like income tax: each rate applies only to the slice of the price that falls in its band. As a first-time buyer in England or Northern Ireland, your bands for 2026/27 are 0% up to £300,000 and 5% on the portion from £300,000 to £500,000.

Worked examples:

• A £300,000 flat: £0 stamp duty.
• A £350,000 house: 5% of the £50,000 above the threshold, so £2,500.
• A £425,000 house: 5% of £125,000, so £6,250.
• A £500,000 house: 5% of £200,000, so £10,000.

Compare that with someone moving home, who pays nothing on the first £125,000, 2% to £250,000 and 5% above that (with 10% and 12% bands past £925,000). On the same £350,000 house they would pay £7,500, so the relief is worth £5,000 there. The stamp duty calculator shows the full band-by-band breakdown for any price.

The £500,000 cliff

First-time buyer relief is not tapered. If the price is £500,000 or less, relief applies. If it is even £1 over, relief vanishes entirely and the standard rates apply to the whole price, not just the part above the cap.

The numbers make the point. At £499,000 you pay £9,950. At £501,000 you pay £15,050. Two thousand pounds more house costs you £5,100 more tax. So if you are negotiating anywhere near £500,000, the cliff is a genuine bargaining argument: a seller asking £505,000 is really asking you for £505,000 plus roughly £5,000 of extra tax compared with a £500,000 deal.

Note this is the rule in England and Northern Ireland only. Scotland (LBTT) and Wales (LTT) run separate taxes with their own bands and their own first-time buyer treatment.

Who counts as a first-time buyer

The definition is stricter than most people expect. You must never have owned a residential property, or a share of one, anywhere in the world. That includes a flat you inherited, a property abroad, and a house you were put on the deeds of years ago. Ownership at any point in your life disqualifies you, even if you sold long ago.

You must also intend to live in the property as your main home. Buying a flat to rent out does not qualify for the relief, even if it is the first property you have ever bought.

The rule that stings couples: if you buy jointly, every buyer must qualify. One partner who owned a studio in their twenties, or inherited a share of a parent's house, removes the relief for the whole purchase. There is no half relief for the qualifying partner; the entire transaction is taxed at standard rates.

Budget for it in cash

Stamp duty is due within 14 days of completion, and in practice your conveyancer collects it with your completion funds and files the return for you. The catch is that it cannot normally be added to the mortgage: lenders advance money against the property, not against your tax bill. So it sits on top of your deposit as cash you need on the day, alongside legal fees and survey costs.

For a first-time buyer at £425,000, that means finding £6,250 of stamp duty in addition to the deposit. Build it into the savings target from the start rather than discovering it at offer stage, and check the whole purchase stacks up with the mortgage affordability calculator before you fall in love with a listing.

Common questions

Can I add stamp duty to my mortgage?

Not in any practical sense. The lender advances money against the property's value, and stamp duty is due in cash within 14 days of completion, collected by your conveyancer alongside completion funds. Treat it as part of your cash-on-the-day budget with the deposit and legal fees.

I inherited a share of a house. Am I still a first-time buyer?

No. Owning any residential property or share of one, anywhere in the world and at any point in your life, disqualifies you, and inheritance counts as ownership. Even a small inherited share of a parent's home removes the relief.

What if I buy at exactly £500,000?

Relief still applies at exactly £500,000: you pay 5% on the £200,000 above the nil band, which is £10,000. Go even £1 over and the relief is lost on the whole price, taking the bill to about £15,000.

Does first-time buyer relief apply in Scotland or Wales?

No. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax, each with its own bands. Scotland has its own first-time buyer relief with a lower threshold; Wales has no first-time buyer relief at all.

Can I claim the relief on a buy-to-let?

No. The relief requires you to intend to live in the property as your main residence. A first purchase that you plan to rent out is taxed at standard rates, even though you have never owned a home before.

Guidance and education, not regulated financial advice.