Are first time buyers exempt from Stamp Duty?

Buying your first home is exciting and a little daunting. Between choosing the right new home and navigating the buying process, it’s easy to get lost in the details. One common question many first time buyers ask is:

“Do I have to pay Stamp Duty?”

The answer isn’t a simple yes or no. While first-time buyers can benefit from Stamp Duty relief, it only applies under certain circumstances.

In this guide, we’ll break down the rules, explain how they work and help you understand what to budget for when buying your first property.

What is Stamp Duty and how does it affect first time buyers?

In England and Northern Ireland, Stamp Duty Land Tax (SDLT) is a one-off tax paid when you purchase a residential property. Scotland and Wales have their own systems (LBTT and LTT), but for most buyers looking at new homes across the UK, SDLT rules are most relevant.

As of April 2025, the rules for first-time buyers in England are:

• 0% SDLT on the first £300,000 of your property price.
• 5% SDLT on the portion between £300,001 and £500,000.
• No relief for properties over £500,000. Standard rates apply.

For example, if you’re buying a new home priced at £350,000, you’ll pay 0% on the first £300,000 and 5% on the remaining £50,000, which comes to £2,500 in Stamp Duty.

Who qualifies for first time buyer relief?

Not everyone buying their first home is automatically exempt. To qualify for first time buyer relief:

• You and any co-buyers must never have owned a residential property anywhere in the world.
• The property must be your main residence, not a buy-to-let or second home.
• The property price must be £500,000 or less. Homes over this threshold are not eligible.
• Both buyers must meet the criteria if purchasing jointly.
• Shared ownership properties may qualify, depending on the structure of the purchase.

Meeting these criteria ensures that first time buyers can take advantage of significant savings on Stamp Duty when purchasing their new home.

First time buyers aren’t automatically exempt from Stamp Duty, but meeting certain criteria can make them eligible for significant relief.

What changed in 2025?

Previously, the thresholds were higher: first-time buyers paid no SDLT on homes up to £425,000, with 5% on the next £200,000. However, from April 2025, the nil-rate band dropped to £300,000 and the relief cap is now £500,000.

This means some buyers who previously wouldn’t have paid stamp duty may now have a small SDLT bill. For example, a £350,000 home would now incur £2,500 in SDLT, whereas under the previous rules, it may have been exempt.

How Stamp Duty works

Buying a new build home can sometimes offer additional benefits:

• Developers occasionally include incentives or shared ownership schemes that may reduce upfront costs.
• Stamp duty is calculated on the purchase price of the home, so any negotiated discounts or incentives can reduce your SDLT liability.
• Some new build developments may also qualify for other tax relief schemes, making them an attractive option for first time buyers.

It’s worth discussing with your solicitor or conveyancer to ensure you’re making the most of any available relief when buying new homes.

Tips for first-time buyers

If you’re searching for new homes on newhomesforsale.co.uk, here are a few tips to help you plan your budget:

• Use a Stamp Duty calculator to estimate costs before making an offer.
• Check the price thresholds carefully. Even small differences in property price can affect how much SDLT you pay.
• Consider shared ownership or incentives on new build developments to reduce upfront costs.
• Consult a conveyancer to ensure relief is applied correctly and to help navigate the buying process.
• Factor in future changes. Stamp Duty rules can shift with new government budgets, so keep an eye on updates.

Key takeaways

So, are first time buyers exempt from paying Stamp Duty? Here’s a simple summary:

• 0% SDLT on homes priced £300,000 or less.
• 5% SDLT on the portion between £300,001 and £500,000.
• No relief on homes above £500,000.

Eligibility depends on being a genuine first time buyer, using the property as your main home and meeting the price thresholds. Even if you do have to pay some Stamp Duty, first time buyer relief can save thousands, making your first step onto the property ladder a little easier.

Final Thoughts

Buying your first property is a big milestone, and understanding stamp duty is key to budgeting effectively. By knowing the rules and taking advantage of first time buyer relief, you can focus on finding the perfect new home without worrying about unexpected costs.

When exploring homes, always check the price, incentives and eligibility for relief. With careful planning, you can enjoy your first home purchase and make the most of the financial savings available to first time buyers.

More helpful blogs for first-time buyers

• First time buyer? Here's how much deposit you'll need
• Boost your deposit: Tips for first time buyers
• What are the stages of buying a home?



New build homes listed under £300,000

• Development: Greenlock Place
• Developer: Avant Homes
• Address: Pontefract Lane, Leeds, West Yorkshire, LS9 0FB


 
 


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• Development: Hartshead View
• Developer: Countryside Homes
• Address: Off Fir Tree Road, Oldham, Greater Manchester, OL8 2LL