Choosing Greenacre Financial Services is the right choice for first-time buyers
Buying your first home is an exciting milestone, but it also comes with several financial considerations. One of the most common concerns for first-time buyers is Stamp Duty Land Tax (SDLT). At Greenacre Financial Services, we understand the complexities of purchasing your first home. Our team of experts are often asked ‘do first time buyers pay stamp duty?’.
Understanding whether you need to pay it, how much it would cost, and any available reliefs can help you budget effectively for your house purchase. We provide tailored mortgage advice, helping you navigate Stamp Duty rates, deposit requirements, and the best first-time buyer mortgage options.
Whether you need guidance on Stamp Duty relief or assistance in finding the right lender, Greenacre is here to support your home-buying journey with our first time buyer mortgage service. In this guide, we break down Stamp Duty for first-time buyers, explain key changes coming in March 2025, and answer frequently asked questions about the Stamp Duty bill.
Stamp Duty on First-Time Buyers
Stamp Duty Land Tax (SDLT) is a tax applied to most residential property purchases in England and Northern Ireland. However, there are special rules for first-time buyers that can significantly reduce or even eliminate the amount of Stamp Duty they owe.
If you are purchasing your main residence for the first time, you may qualify for Stamp Duty relief, meaning you won’t have to pay tax on the first portion of your purchase price.
First-Time Buyer Stamp Duty Threshold
The amount of Stamp Duty you pay depends on the value of the property price. As a first-time buyer, you currently benefit from a higher Stamp Duty relief threshold. However, these thresholds are set to change from 1st April 2025, affecting how much tax first-time buyers will pay.
Current Stamp Duty Rates for First-Time Buyers (Until 31st March 2025):
Property Price | Stamp Duty Rate |
---|---|
£0 – £425,000 | 0% |
£425,001 – £625,000 | 5% |
£625,001+ | Standard rates apply |
This means that if you purchase a home for £429,000, you only pay 5% on the £4,000 that exceeds the £425,000 threshold, resulting in a Stamp Duty bill of £200.
Stamp Duty Changes for First-Time Buyers from 1st April 2025
The Autumn Budget 2022 introduced temporary reliefs that will end on 31st March 2025. From 1st April 2025, first-time buyers will face lower tax-free thresholds, meaning more buyers will have to pay Stamp Duty.
New Stamp Duty Rates from 1st April 2025:
Property Price | Stamp Duty Rate |
---|---|
£0 – £300,000 | 0% |
£300,001 – £500,000 | 5% |
£500,001+ | Standard rates apply |
From April 2025, if you purchase a home worth £400,000, you will pay 5% on £100,000, resulting in a Stamp Duty bill of £5,000. If your property is worth more than £500,000, standard rates will apply, meaning you could pay significantly more.
How Much Is Stamp Duty for First-Time Buyers?
To estimate how much Stamp Duty you may need to pay, consider the purchase price and whether your transaction falls under the current or upcoming tax rules. Here are some examples:
- £250,000 home (before and after 1st April 2025): No Stamp Duty.
- £350,000 home (before 31st March 2025): No Stamp Duty.
- £350,000 home (after 1st April 2025): 5% on £50,000 = £2,500.
- £600,000 home: Standard Stamp Duty rates apply in both cases.
These changes highlight the importance of planning your house purchase before March 2025 if possible.
Stamp Duty in Scotland and Wales
Different tax systems apply to Scotland and Wales:
- Scotland: Land and Buildings Transaction Tax (LBTT) applies. First-time buyers don’t pay LBTT on properties up to £175,000.
- Wales: No Land Transaction Tax (LTT) on homes up to £225,000.
Both systems work differently from England and Northern Ireland, so if you’re buying outside these areas, check the relevant government websites for details.
Answering Common Stamp Duty Questions
Do First-Time Buyers Pay Stamp Duty in 2025?
Yes, the rules will change from 1st April 2025, reducing the tax-free threshold. If you buy a home worth more than £300,000, you will have to pay 5% tax on the amount exceeding this limit.
How Much Is Stamp Duty in the UK for First-Time Buyers?
Currently:
- 0% up to £425,000 (until 31st March 2025).
- 5% between £425,001 and £625,000.
- Standard rates above £625,000.
From 1st April 2025:
- 0% up to £300,000.
- 5% between £300,001 and £500,000.
- Standard rates apply beyond £500,000.
Additional Considerations for Stamp Duty
- Buying a Home with a Joint Mortgage: If you’re purchasing with someone else, both buyers must be classified as first-time buyers to benefit from Stamp Duty relief. If one person has previously owned a residential property, standard Stamp Duty rates will apply.
- Stamp Duty on Second Homes or Additional Properties: If you’re purchasing a second home or additional properties, you won’t qualify for first-time buyer relief and will have to pay a Stamp Duty surcharge.
- Non-UK Residents Buying Property: If you are not classified as a UK resident, an additional 2% Stamp Duty surcharge applies, regardless of whether you are a first-time buyer.
- Land and Buildings Transaction Considerations: Some land tax rules apply differently if you’re buying mixed-use property (e.g., a flat above a shop). In these cases, Stamp Duty rates differ from standard residential property purchases.
How Greenacre Can Help You
At Greenacre Financial Services, we offer expert guidance on first-time buyer mortgages, Stamp Duty relief, and tailored financial solutions to make your house purchase as smooth as possible. Our dedicated mortgage advisors will help you understand your Stamp Duty bill, explore financing options, and secure the best mortgage deals.
We work closely with lenders to ensure you get the most competitive rates and help you navigate the entire mortgage application process. Whether you need support with joint mortgage applications, advice on deposit requirements, or insights into Stamp Duty changes, Greenacre is here to assist you every step of the way.
Get in touch with Greenacre Financial Services today and take the next step towards owning your first home with confidence.
Final Thoughts on Stamp Duty for First-Time Buyers
If you’re looking to move or buy your first home, understanding Stamp Duty relief and upcoming Stamp Duty changes is essential. With tax thresholds set to decrease from April 2025, you might save money by buying before the deadline.
Whether you’re applying for a first-time buyer mortgage, budgeting for a deposit, or planning your house purchase, getting the right advice can help you make an informed decision.
For more information about any of our services, or if you have any questions, including do first time buyers pay stamp duty?, feel free to get in touch or call us on 0203 3939 222.