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7th December 2021

Do First Time Buyers pay Stamp Duty

Many homeowners, no matter what their circumstances are, need to consider the impact of stamp duty on their property purchase. Particular attention should be paid by first time buyers who often find it slightly more challenging to access the property market. This group is influenced slightly differently, which often leaves them questioning, ‘Do First Time Buyers pay Stamp Duty?’

Purchasing a property is expensive and daunting. There are several fees to be paid on certain properties but not others and the price of these fees can fluctuate. The price, condition and area of the property each influence the expenses and timeline for it’s purchase. Along with conveyancing searches and home surveys, stamp duty is a payment that will be calculated in accordance with your specific property. 

Within this article, discover how much stamp duty you should pay as a first time buyer. 


What is Stamp Duty

Stamp Duty Land Tax (SDLT) is a fee paid on top of a property purchase in accordance with the value of the house. Originally introduced in 1694 as a way to raise funds for war, the tax has evolved as a method of gathering revenue for the government.

For most typical homebuyers, Stamp Duty Land Tax is paid on properties above the value of £125,000. The amount to be paid is calculated using the value of your property. There are various bands which increase in percentage along with the price of a property. The current system is as follows:

Purchase Price Bands (£)                                                 Rate (%)

Up to £125,000                                                                                    0%

For the next £125,000 (£125,001 to £250,00)                             2%

The next £675,000 (£250,001 to £925,0000)                             5%

For the next £575,000 (£925,001 to £1.5 million)                      10%

The remaining amount (Above £1.5 million)                               12%

Working alongside a professional conveyancing solicitor will ensure that your stamp duty is paid on time and you know exactly how much it will cost.


There are certain exemptions or changes depending on your circumstances. Certain properties will incur higher costs whereas others will have less to pay.

  • Purchasing a second property

Outlined above are the standard rates of stamp duty paid by most homebuyers. This applies when they don’t already own another property, such as selling their home to move to another. When purchasing an additional property, such as a second home or buy-to-let, there are additional charges associated.

As well as the standard rate of stamp duty for the value of the purchased property, individuals purchasing a second property will face an additional 3% charge on top of this tax amount.

  • Stamp Duty Holiday 2020/21

As a result of the COVID-19 pandemic and its consequences for the UK economy, the government introduced a stamp duty holiday to encourage engagement with the property market. This exemption lasted from June 2020 until the 30th September 2021 when they returned to their standard rates.

The stamp duty holiday meant that anybody purchasing a residential property didn’t have to pay stamp duty on properties up to the value of £500,000. There was additionally a reduced rate for properties above this price.


Do First Time Buyers Pay Stamp Duty?

To answer this question simply, the majority of first time buyers won’t pay stamp duty. This is because there is an exemption for first time buyers purchasing a property up to the value of £300,000.

For properties costing up to £500,000, there continues to be no tax paid on the first £300,000. However, the remaining proportion of the price of the property, up to £200,000 faces a 5% stamp duty charge.

For first time buyers, this stamp duty relief was introduced by the UK government on the 22nd November 2017. It’s intentions were to make the housing market more accessible. One of the many critiques of Stamp Duty land tax is that it reduces mobility of the housing market. Many first time buyers often won’t have access to lump sum amounts which aren’t available for large deposits or stamp duty payments.


First time buyers eligibility

Whilst exemptions and reduced rates create a far more accessible market for first time buyers, there are strict limitations on who can benefit from the change. 

There are fairly strict restrictions placed on the individuals who can be classed as first time buyers. A First Time Buyer is defined in these circumstances as an individual who has never owned property in any previous capacity. This extends to owning shares or inheriting any part of a property. These individuals would not benefit from the stamp duty reduction or other first time buyer scheme. 

There are also some restrictions on the functionality of the property. Any property purchased with a stamp duty reduction should have the intent of becoming the purchaser’s main residence. Purchasing a property for buy-to-let purposes would be considered outside the scope of eligibility.

Final Thoughts

For many first time buyers, accessing the property ladder can be challenging. It can take several years of saving to gather the necessary funds for the deposit, let alone conveyancing fees and stamp duty costs. 

In addition to various government schemes that promote the purchase process to first time buyers, a stamp duty exemption was introduced for properties up to £300,000 with reductions on properties up to £500,000. With this change, first time buyers are invited to own their first home through accessible means.