First Time Buyer Stamp Duty

Everything You Need to Know About Stamp Duty for First Time Buyers

first time buyer mortgage scheme

First Time Buyer Stamp Duty Explained

first time buyer advice

Stamp duty is an important consideration for all home-buyers, but especially for first time buyers, who may not be aware of what stamp duty is and how it affects them. 

There is no need to fret – we have put together this guide on first time buyer stamp duty to answer all your questions. In this article, we will explain everything you need to know about stamp duty for first time buyers, including what it is, how much it costs and when to pay it. 

In addition to paying stamp duty, there is an endless list of things to consider when buying your first house. 

One thing many first time buyers forget to do when moving out is to update their address across all their accounts and services. 

Luckily for you, SlothMove’s online address change service allows you to update your address across all your providers in one go! 

To get started with changing your address, simply fill out the form below (it only takes a few minutes):

Enter address manually

This Article Covers

What is Stamp Duty?

first time buyer deposit

Before we get started on the details, let’s make sure we cover the basics – what actually is stamp duty? 

Stamp duty Land Tax (SDLT) is a tax paid by the buyer of a UK residential property when the purchase price exceeds £125,000. Stamp duty rates can range from 2% to 12% of the purchase price, depending on the value of the property bought and the purchase date. 

Property purchases for which stamp duty is imposed, include:

  • Freehold property
  • New or existing leasehold 
  • Shared Ownership properties 
  • The transfer of land or property in exchange for payment

Do First Time Buyers Pay Stamp Duty?

first time buyer stamp duty

A lot of first time buyers are actually exempt from paying stamp duty on the purchase of their new home. If you are a first time buyer purchasing a home that costs £300,000 or less, then you do not have to pay stamp duty. Lucky you! 

Alternatively, if you are purchasing a home which is priced higher than this threshold, you will only have to pay stamp duty on the value above £300,000 as long as the property is valued below £500,000. 

If the property you’re purchasing costs more than £500,000, then you will not be entitled to any relief and will have to pay stamp duty at the normal rate. 

Most first time buyers don’t need to worry about this though, as most people buying their first home won’t be spending more than £300,000. 

How Much is Stamp Duty for First Time Buyers?

moving home first time buyer

For first time buyers who fall between the £300,000 and £500,000 band, they will pay stamp duty at 5% on the amount of the purchase price.

First time buyers purchasing a property up to £500,000 in value are eligible for discounted stamp duty rates:

Up to £300,000 = 0%

Between £300,001 and £500,000 = 5%

What is a Stamp Duty Holiday?

moving home myths

The stamp duty holiday was introduced in July 2020, then extended until 30 June 2021, in response to the Coronavirus pandemic. This meant that buyers completing a purchase on a property for less than £500,000 before 1 July 2021 didn’t have to pay any stamp duty. 

The Government hoped that by introducing the stamp duty holiday, they would instil more confidence in people to buy, sell and renovate properties, in turn supporting jobs and driving economic growth in the UK. 

These stamp duty ‘holidays’ have now ended, with stamp duty rates returning to normal in stages. From 1 July to 30 September, stamp duty was payable on the cosy of properties above £250,000. Then, from 1 October, it returned to pre-holiday rates, starting at £125,000. 

Thus, for first time buyers to have benefitted from the stamp duty holiday, they must have completed their property purchase by 30 September. If they exchanged on or before 30 September, but completed after this date, they will have missed the deadline and will have to pay normal stamp duty rates.

When Do You Pay Stamp Duty?

first time buyer stamp duty

You should pay stamp duty upon completion of your property purchase. After completion, you have 14 days to file a return to HMRC and pay any stamp duty that is due. 

Your solicitor or conveyancer will usually calculate and pay your stamp duty bill on your behalf so there is no need to worry.

In this article we have explained everything you need to know about stamp duty for first time buyers. Hopefully, we have answered all your first time buyer stamp duty questions so that you can better understand what it is and how it could affect your house purchase


Update your address

Take the hassle and stress out of your move and update your address with hundreds of companies

Sally M

“A brilliant service and will definitely not forget this for future! I will of course recommend you to any of my friends and family, you save so much hassle! It’s brilliant, especially when moving house is one of the most stressful things in our lives!”