What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax you pay when buying property in England and Northern Ireland. Scotland has LBTT (Land and Buildings Transaction Tax) and Wales has LTT (Land Transaction Tax) with different rates.
First Time Buyer Relief
First time buyers benefit from stamp duty relief, meaning you pay less (or nothing) compared to other buyers. This can save you thousands of pounds.
Current first time buyer stamp duty rates:
- £0 - £425,000: 0% (no stamp duty)
- £425,001 - £625,000: 5% on the amount above £425,000
- Above £625,000: Standard rates apply (no first time buyer relief)
Example: Buying a £500,000 property as a first time buyer. You pay 0% on the first £425,000 and 5% on the remaining £75,000 = £3,750 stamp duty. A non-first time buyer would pay £12,500.
Who Qualifies as a First Time Buyer?
To qualify for first time buyer relief, you must never have owned a property anywhere in the world. This applies to all buyers if purchasing jointly.
If you're buying with someone who has owned property before (even if they've sold it), you won't qualify for first time buyer relief. The standard rates will apply to the whole purchase.
When Do You Pay?
Stamp duty is due within 14 days of completion. Your solicitor will usually handle this for you, collecting the money as part of the completion process.
Standard Rates for Comparison
If you don't qualify for first time buyer relief, or your property is over £625,000, standard rates apply.
Standard stamp duty rates:
- £0 - £250,000: 0%
- £250,001 - £925,000: 5%
- £925,001 - £1,500,000: 10%
- Above £1,500,000: 12%