Stamp duty is the tax nobody budgets for until the solicitor asks for it, and for first-time buyers the rules changed for the worse in April 2025. The relief that used to shelter purchases up to £425,000 was cut back, and a hard cliff edge at £500,000 now catches anyone buying a slightly pricier first home. If you are saving for a deposit, knowing exactly where these lines fall can change which homes you even look at. Here is what first-time buyers actually pay in 2025/26.
The rules got tighter in April 2025 The first-time buyer nil-rate band dropped from £425,000 to £300,000, and the maximum price you can claim any relief on fell from £625,000 to £500,000. If your first home costs more than £500,000, you get no first-time buyer relief at all and pay the standard rates on the whole price.
What stamp duty is
Stamp Duty Land Tax (SDLT) is a tax on buying property in England and Northern Ireland. (Scotland has its own LBTT and Wales its own LTT, with different thresholds.) It is charged in bands, like income tax — you pay each rate only on the slice of the price that falls in that band, not on the whole purchase.
For most buyers the standard 2025/26 residential rates are:
| Portion of price | Standard rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5m | 10% |
| Above £1.5m | 12% |
First-time buyers get a more generous version of this — but only within limits.
The first-time buyer relief, in plain terms
If you (and anyone you are buying with) have never owned a home anywhere in the world, and the property costs £500,000 or less, you qualify for first-time buyer relief:
- 0% on the first £300,000
- 5% on the portion from £300,001 to £500,000
- Buy at £300,000 or under → you pay zero stamp duty.
- Buy between £300,001 and £500,000 → you pay 5% only on the slice above £300,000.
- Buy at £500,001 or more → relief vanishes entirely and you pay standard rates on the whole price.
Worked examples
Nothing makes this clearer than real numbers. Here is what three first-time buyers pay.
A £295,000 flat: the whole price is under £300,000, so the bill is £0. Nothing to pay.
A £425,000 house:
First £300,000
taxed at 0% = £0.
Remaining £125,000 (£300,001 to £425,000)
taxed at 5% = £6,250.
Total stamp duty
£6,250.
A £510,000 house — just over the cliff, so no relief:
First £125,000
0% = £0.
£125,001 to £250,000
2% on £125,000 = £2,500.
£250,001 to £510,000
5% on £260,000 = £13,000.
Total stamp duty
£15,500.
The cliff edge that can cost you thousands
Look closely at that last example. A first-time buyer at exactly £500,000 pays £10,500 (0% on £300k, 5% on £200k). Push the price just £10,000 higher to £510,000 and the bill jumps to £15,500 — a £5,000 increase for £10,000 of house, because you lose the relief on the entire purchase, not just the bit over £500,000.
This makes the £500,000 mark a genuine negotiating line. If a property is listed at £505,000–£520,000 and you are a first-time buyer, getting the price agreed at £500,000 or below is worth far more than the few thousand pounds of headline discount — it can swing the relief back into play. Run any price through our stamp duty calculator to see the exact figure before you offer.
How to keep the relief
A few practical points that trip people up:
- Everyone buying must be a first-time buyer. If you buy with a partner who has owned before — even abroad, even years ago — the relief is lost for the whole purchase. This catches a lot of couples.
- Inherited property counts. If you have ever owned a share of a property, including one you inherited, you are not a first-time buyer.
- It is the price, not the mortgage, that matters. The £500,000 test is on the purchase price, regardless of how much you are borrowing.
- You normally have 14 days from completion to file the return and pay, which your solicitor handles — but the money has to be ready, so build it into your savings target.
Don't forget the rest of the buying costs
Stamp duty is only one line in the bill. A first-time buyer also needs a deposit, solicitor's fees, survey costs, mortgage arrangement fees and moving costs. On a £425,000 purchase the £6,250 of stamp duty might sit alongside £2,000 of legal and survey fees and a 10% deposit of £42,500. Our house buying costs calculator totals the cash you actually need on the day, and the mortgage calculator shows what the monthly repayments look like once you are in.
Frequently asked questions
Only above £300,000. There is no stamp duty on a first home costing £300,000 or less. Between £300,001 and £500,000 you pay 5% on the portion above £300,000. Above £500,000 you lose the relief and pay standard rates on the whole price.
The first-time buyer nil-rate band fell from £425,000 to £300,000, and the maximum eligible price dropped from £625,000 to £500,000. Both changes made stamp duty more expensive for first-time buyers of mid-to-higher priced homes.
No. Every buyer must be a first-time buyer for the relief to apply. If one of you has previously owned property anywhere in the world, the purchase is taxed at standard rates.
No. SDLT applies in England and Northern Ireland. Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT), each with its own bands and first-time buyer treatment.
Stamp duty must usually be paid in cash shortly after completion, not borrowed as part of the mortgage. Some buyers increase their loan elsewhere to free up cash, but the tax itself is a separate, upfront cost to budget for.
Figures are 2025/26 estimates for England and Northern Ireland. Always confirm your exact liability with your conveyancer before committing, and treat calculator results as a guide.