How Does Stamp Duty Work For First-Time Buyers
By: Mike Whitehead, Posted: March 29, 2023
Stamp duty land tax (SDLT) – a tax you pay when you purchase property or land – can feel quite daunting to figure out, particularly if you’re a first-time buyer.
The thresholds and rates which apply can differ depending on the value of the property and where exactly in the UK you’re looking to buy.
So, if you’re buying a property for the first time in either England or Northern Ireland then you may be liable for SDLT on that purchase.
For Scotland, stamp duty was replaced by the Scottish government in 2015 with the Land And Buildings Transaction Tax (LBTT) and if you’re buying a property in Wales then it will be subject to Land Transaction Tax (LTT).
Do you have to pay stamp duty if you’re a first-time buyer?
Yes you do. However, the good news is the threshold reliefs are more generous for most first-time buyers than they are for anyone who has previously bought a property.
Again, though this depends on where in the UK you’re looking to purchase.
If you’re buying a property either in England or Northern Ireland at the time of writing (March 2023) the nil-rate band threshold starts at £425,000 (for other types of buyers this starts at £250,000).
The table below outlines the applicable rates and thresholds:
| Property Value Thresholds | SDLT Rate |
| Up to £425,000 | 0% |
| £425,001-£625,000 | 5% |
So, for example if you’re buying your first home and its purchase price/value is £500,000 you would pay 0% SDLT on the first £425,000 and 5% on the remaining £75,000, which would equate to £3,750 (£75,000 x 5%).
The additional relief only applies on properties valued at or below £625,000. If you’re a first-time buyer and purchasing a property valued above this then standard rates and thresholds will apply (see table below).
Scotland and Wales
If you’re buying a property in Scotland you can also claim additional relief for LBTT. The standard nil-rate band for anyone who has bought a property before starts at £145,000 whereas for first-time buyers the threshold starts higher at £175,000.
However, in Wales there is no additional relief, therefore, the starting nil-rate band threshold for LTT is the same for first-time buyers as it is for everyone else – £225,000.
Standard Stamp Duty rates across the UK
In addition to the relief available for first-time buyers, for England and Northern Ireland the SDLT rates can differ further depending on whether the property you’re buying is your main residence or a second home/buy-to-let investment.
The table below outlines what these rates are.
| Property Value | Standard SDLT Rates | Second Home / Buy-to-let Property |
| Up to £250,000 | 0% | 3% |
| £250,001-£925,000 | 5% | 8% |
| £925,001-£1.5 million | 10% | 13% |
| Amount above £1.5 million | 12% | 15% |
If you’re a non-UK resident there is an additional 2% stamp duty surcharge payable, depending on the circumstances of the purchase.
So, for example if you’re buying a second home in England valued at £200,000 then your SDLT liability would be £10,000 (£200,000 x 5% = £10,000).
Scotland Land and Buildings Transaction Tax (LBTT)
For residential properties in Scotland the following standard LBTT rates and thresholds apply.
| Property Value / Purchase Price | LBTT Rates |
| Up to £145,000 | 0% |
| £145,001-£250,000 | 2% |
| £250,001-£325,000 | 5% |
| £325,001-£750,000 | 10% |
| Over £750,000 | 12% |
Wales Land Transaction Tax (LTT)
The standard LTT rates for residential properties in Wales are as follows.
| Property Value / Purchase Price | LTT Rates |
| Up to £225,000 | 0% |
| £225,001-£400,000 | 6% |
| £400,001-£750,000 | 7.5% |
| £750,001-£1.5 million | 10% |
| Over £1.5 million | 12% |
Stamp Duty Calculator
If you’re a first time buyer and want to work out what your stamp duty liability is you can use our calculator below.
It’s completely free to use and just requires some simple details regarding the property you’re looking to buy.
Once you’ve inputted the property value click on the toggle button underneath and the calculator will show you how much tax there is to pay.
Stamp Duty Calculator
This calculator can tell you how much Stamp Duty Land Tax you will need to pay on your property purchase, whether you're a first-time buyer, a home-mover or in the market for an investment property.
Your stamp duty to pay is:
Your effective tax rate is
Now that you've worked out how much stamp duty is payable, it's a good idea to talk to a broker about your mortgage options. They can help you make sure you aren't paying over the odds with all costs and fees factored in.
Once you’ve worked out your stamp duty liability you’re ready to move onto the next stage in the mortgage process.
If you get in touch we can arrange for a mortgage broker to speak with you who can help with identifying the right mortgage lenders currently offering the most competitive interest rate deals.