Key Points for First-Time Buyers in 2025
- 0% SDLT on the first £300,000 of properties costing up to £500,000
- 5% SDLT on the portion from £300,001 to £500,000 — maximum tax of £10,000
- No relief if the property costs more than £500,000 — standard rates apply
- Thresholds reduced from 1 April 2025 (previously £425,000 / £625,000)
- All purchasers must be first-time buyers — joint buyers with a previous owner do not qualify
- Scotland offers separate LBTT first-time buyer relief up to £175,000
- Wales has no specific first-time buyer relief for LTT
What Is First-Time Buyer Stamp Duty Relief?
First-time buyer stamp duty relief is a government scheme that reduces or eliminates Stamp Duty Land Tax (SDLT) for people purchasing their first residential property in England or Northern Ireland. Introduced in November 2017 by then-Chancellor Philip Hammond, the relief was designed to make home ownership more accessible by removing one of the significant upfront costs of buying a property.
The relief works by raising the nil-rate threshold — the amount you can pay for a property before any stamp duty becomes payable. For qualifying first-time buyers, the nil-rate threshold is significantly higher than the standard threshold, meaning you either pay no stamp duty at all, or substantially less than a non-first-time buyer would pay on the same property.
This relief is one of the most valuable financial benefits available to first-time buyers. On a property costing £300,000, a first-time buyer pays £0 in SDLT, whereas a standard buyer would pay £2,500. On a property costing £500,000, a first-time buyer pays £10,000 compared to the standard rate of £12,500 — a saving of £2,500.
Current First-Time Buyer SDLT Rates (From April 2025)
The following rates apply to first-time buyer purchases completing on or after 1 April 2025 in England and Northern Ireland. These rates replaced the temporarily higher thresholds that were in effect from 23 September 2022 to 31 March 2025.
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% |
| Over £500,000 | No relief — standard rates apply |
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
Previous First-Time Buyer Thresholds (Before April 2025)
Between 23 September 2022 and 31 March 2025, the government temporarily increased the first-time buyer thresholds as part of the mini-Budget measures. During this period:
- 0% SDLT on the first £425,000 (up from £300,000)
- 5% SDLT on the portion from £425,001 to £625,000
- Maximum property price for relief: £625,000 (up from £500,000)
These temporary thresholds expired on 31 March 2025 and were not extended. If your purchase completed before 1 April 2025, you would have benefited from the higher thresholds. From 1 April 2025, the thresholds reverted to the pre-September 2022 levels of £300,000 and £500,000.
| Detail | Before April 2025 | From April 2025 |
|---|---|---|
| Nil-rate threshold | £425,000 | £300,000 |
| Maximum property price | £625,000 | £500,000 |
| Rate above nil-rate band | 5% | 5% |
| Maximum SDLT payable with relief | £10,000 | £10,000 |
| SDLT on £350,000 property | £0 | £2,500 |
| SDLT on £500,000 property | £3,750 | £10,000 |
Who Qualifies as a First-Time Buyer?
HMRC has a specific legal definition of a first-time buyer for stamp duty relief purposes. It is stricter than you might expect, and it is essential to understand whether you meet the criteria before relying on the relief in your property purchase budget.
HMRC's Definition
A first-time buyer is an individual who has never owned a freehold interest in a residential property, and has never held a leasehold interest in a residential property where the original lease term was for more than 21 years. This applies to property ownership anywhere in the world, not just in the United Kingdom.
What Counts as Previous Ownership?
You will not qualify as a first-time buyer if you have ever:
- Purchased a residential property (even if you have since sold it)
- Inherited a residential property (even a share of one)
- Received a residential property as a gift
- Owned a buy-to-let property (even if you never lived in it)
- Owned a long leasehold interest (original term over 21 years) in a residential property
- Owned residential property overseas
Joint Purchases and First-Time Buyer Status
When two or more people buy a property together, every purchaser named on the transfer deed must meet the first-time buyer criteria. If even one of the joint buyers has previously owned a residential property, none of the purchasers can claim first-time buyer relief.
This is particularly important for couples where one partner has owned a property before. Common scenarios include:
- Both partners are first-time buyers: Relief is available — full FTB rates apply
- One partner previously owned property: No relief for either partner — standard rates apply to the full purchase
- Buying with a parent who owns property: No relief available — consider whether the parent needs to be on the deed
Shared Ownership and First-Time Buyers
First-time buyers purchasing through a shared ownership scheme can claim SDLT relief, but the rules are slightly different depending on how you choose to pay SDLT.
Option 1: Market Value Election
You can choose to pay SDLT based on the full market value of the property at the time of purchase. If the full market value is £500,000 or less, first-time buyer relief applies. You pay nothing on the first £300,000 and 5% on the portion above that. The advantage is that you will not pay additional SDLT when you staircase (buy further shares) in the future.
Option 2: Pay on Your Share Only
Alternatively, you can pay SDLT based on the value of the share you are purchasing plus the capitalised value of any rent payable. First-time buyer relief may apply to this lower amount. However, you will need to pay SDLT on each subsequent staircasing transaction when you buy additional shares.
Your solicitor or conveyancer should advise you on which option is more cost-effective based on your circumstances and future plans for the property.
Help to Buy and Stamp Duty
The Help to Buy equity loan scheme closed to new applicants in October 2022 (with completions by 31 March 2023). If you purchased under Help to Buy, first-time buyer SDLT relief applied to the full purchase price (not just your equity share), provided you met the eligibility criteria and the purchase price was within the threshold.
For those who purchased under Help to Buy and are now repaying the equity loan, no further SDLT is payable on the loan repayment itself, as it is not a property transaction.
Worked Examples: First-Time Buyer vs Standard Rates
The following examples show exactly how much SDLT a first-time buyer would pay compared to a standard buyer (someone who has owned property before) at three common price points. All calculations use the rates effective from 1 April 2025.
Example 1: Property Costing £250,000
| Band | First-Time Buyer | Standard Buyer |
|---|---|---|
| £0 – £125,000 | 0% = £0 | 0% = £0 |
| £125,001 – £250,000 | 0% = £0 | 2% = £2,500 |
| Total SDLT | £0 | £2,500 |
| Saving with FTB relief | £2,500 | |
At £250,000, the first-time buyer pays no stamp duty at all, saving £2,500 compared to the standard buyer.
Example 2: Property Costing £350,000
| Band | First-Time Buyer | Standard Buyer |
|---|---|---|
| £0 – £125,000 | 0% = £0 | 0% = £0 |
| £125,001 – £250,000 | 0% = £0 | 2% = £2,500 |
| £250,001 – £300,000 | 0% = £0 | 5% = £2,500 |
| £300,001 – £350,000 | 5% = £2,500 | 5% = £2,500 |
| Total SDLT | £2,500 | £7,500 |
| Saving with FTB relief | £5,000 | |
At £350,000, the first-time buyer saves £5,000 — a significant sum that could contribute towards furnishing costs, legal fees, or mortgage arrangement fees.
Example 3: Property Costing £450,000
| Band | First-Time Buyer | Standard Buyer |
|---|---|---|
| £0 – £125,000 | 0% = £0 | 0% = £0 |
| £125,001 – £250,000 | 0% = £0 | 2% = £2,500 |
| £250,001 – £300,000 | 0% = £0 | 5% = £2,500 |
| £300,001 – £450,000 | 5% = £7,500 | 5% = £7,500 |
| Total SDLT | £7,500 | £12,500 |
| Saving with FTB relief | £5,000 | |
At £450,000, the maximum saving of £5,000 applies. The FTB relief effectively removes the 0% and 2% bands that would otherwise cost £5,000 in SDLT. Any property priced between £300,001 and £500,000 produces the same £5,000 saving for a first-time buyer.
First-Time Buyers in Scotland and Wales
Stamp Duty Land Tax (SDLT) only applies in England and Northern Ireland. Scotland and Wales each have their own property transaction taxes with different rules for first-time buyers.
Scotland: LBTT First-Time Buyer Relief
Scotland charges Land and Buildings Transaction Tax (LBTT) instead of SDLT. First-time buyers in Scotland benefit from a separate relief scheme administered by Revenue Scotland.
| Up to £175,000 | 0% |
| £175,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
| Up to £145,000 | 0% |
| £145,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
The Scottish first-time buyer relief raises the nil-rate band from £145,000 to £175,000, providing a maximum saving of £600 (2% of the additional £30,000). While less generous than the SDLT relief available in England and Northern Ireland, it is available on properties of any value — there is no upper price limit that disqualifies you, unlike the £500,000 cap in England.
Wales: Land Transaction Tax (LTT)
Wales charges Land Transaction Tax (LTT) administered by the Welsh Revenue Authority (WRA). Unlike England/Northern Ireland and Scotland, Wales does not offer any specific first-time buyer relief. All buyers pay the same LTT rates regardless of whether they have owned property before.
| Up to £225,000 | 0% |
| £225,001 – £400,000 | 6% |
| £400,001 – £750,000 | 7.5% |
| £750,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
While Wales has no first-time buyer relief, the higher nil-rate threshold of £225,000 (compared to £125,000 for standard SDLT in England) does benefit all buyers, including first-time purchasers. On a £225,000 property, both first-time and standard buyers in Wales pay zero LTT.
First-Time Buyer Stamp Duty Calculator
Enter a property price to instantly compare what you would pay as a first-time buyer versus the standard SDLT rates. This calculator uses the rates effective from 1 April 2025 for England and Northern Ireland.
Enter the property price in pounds without the pound sign
| Band | FTB Rate | FTB Tax | Standard Rate | Standard Tax |
|---|
How to Claim First-Time Buyer Stamp Duty Relief
Claiming the relief is straightforward, but it must be done correctly as part of the conveyancing process. Here is how it works step by step.
Step 1: Confirm Your Eligibility
Before exchange of contracts, confirm with your solicitor that you (and any joint buyer) meet HMRC's first-time buyer definition. Your solicitor should ask you to confirm in writing that you have never owned a residential property anywhere in the world.
Step 2: Instruct Your Solicitor
Your solicitor or licensed conveyancer handles the SDLT return as part of the conveyancing process. Inform them that you are a first-time buyer so they can apply the correct rates and claim the relief on your SDLT return (form SDLT1).
Step 3: The SDLT Return
The SDLT return must be filed with HMRC within 14 days of completion. Your solicitor will complete the return using transaction code 32 (first-time buyer relief) and submit it electronically. The reduced SDLT amount is paid at the same time.
Step 4: If You Forgot to Claim
If first-time buyer relief was not claimed on the original SDLT return — perhaps your solicitor used the wrong transaction code or did not apply the relief — you can amend the return within 12 months of the original filing date. You can do this online via HMRC's SDLT portal or by writing to HMRC's Stamp Duty Land Tax team. Any overpaid SDLT will be refunded.
Common Mistakes to Avoid
- Not telling your solicitor: Some solicitors may not automatically check your first-time buyer status. Make sure to raise this proactively.
- Forgetting overseas property: Property owned in any country counts. If you owned a flat in Spain ten years ago (even if now sold), you are not a first-time buyer.
- Inherited property: Even a small inherited share in a residential property disqualifies you.
- Assuming the relief is automatic: The relief must be actively claimed on the SDLT return. It does not apply by default.
- Buying just over £500,000: The cliff edge at £500,000 can cost you thousands. If possible, negotiate the price below this threshold.
First-Time Buyer Stamp Duty: Frequently Asked Questions
From April 2025, first-time buyers in England and Northern Ireland pay 0% SDLT on the first £300,000 of properties costing up to £500,000, and 5% on the portion between £300,001 and £500,000. This means you pay no stamp duty at all on properties up to £300,000, and a maximum of £10,000 on properties costing exactly £500,000. If the property costs more than £500,000, you cannot claim first-time buyer relief and standard SDLT rates apply to the entire purchase price.
The first-time buyer nil-rate threshold returned to £300,000 from 1 April 2025. This means first-time buyers pay no stamp duty on properties costing up to £300,000. The maximum property price eligible for any first-time buyer relief is £500,000. Between September 2022 and March 2025, the thresholds were temporarily higher at £425,000 and £625,000 respectively.
HMRC defines a first-time buyer as an individual who has never owned a freehold or leasehold interest (with an original term over 21 years) in a residential property anywhere in the world. This includes property purchased, inherited, or received as a gift. The property being purchased must be intended as the buyer's main residence. If you are buying with another person and either of you has previously owned property, neither of you qualifies for first-time buyer relief.
Yes. First-time buyers purchasing shared ownership properties can claim SDLT relief. You have two options: pay SDLT on the full market value of the property (market value election), or pay SDLT on just the share you are purchasing. If you choose the market value election, first-time buyer relief applies provided the full market value is £500,000 or less. If you pay on your share only, the initial SDLT may be lower but you will pay SDLT on future staircasing transactions.
If you buy a property jointly with someone who has previously owned a residential property, neither of you can claim first-time buyer stamp duty relief. All purchasers named on the transfer deed must meet HMRC's definition of a first-time buyer. This applies to married couples, civil partners, and any other joint purchasers. The standard SDLT rates will apply to the entire transaction. Consider whether the non-first-time buyer needs to be on the deed, or take professional advice on alternatives.
Yes, but Scotland has its own system called Land and Buildings Transaction Tax (LBTT). First-time buyers in Scotland benefit from a raised nil-rate threshold of £175,000 (compared to £145,000 for other buyers), providing a maximum saving of £600. Unlike England's SDLT relief, there is no upper property price limit — the relief applies regardless of the purchase price, though the saving is always capped at £600.
First-time buyer relief is claimed on the SDLT return (form SDLT1), which must be submitted to HMRC within 14 days of completion. Your solicitor or conveyancer will normally handle this as part of the conveyancing process. You do not need to apply separately — the relief is claimed by using the correct transaction code on the return. If the relief was not claimed at the time of purchase, you can amend the return within 12 months of the filing date to claim a refund of overpaid SDLT.