First-Time Buyer Stamp Duty Relief: How Much Can You Save?

First-time buyers in England and Northern Ireland can save thousands on stamp duty through government relief. Pay zero stamp duty on properties up to £425,000 – that's a potential saving of £8,750 compared to standard rates. With UK house prices averaging £272,000, most first-time buyers pay no stamp duty at all.

However, strict eligibility rules apply, and one mistake can cost you thousands. This comprehensive guide explains exactly how first-time buyer (FTB) relief works, who qualifies, and how much you'll save on properties from £200,000 to £625,000.

Quick Summary

• Relief threshold: 0% on first £425,000 (if property under £625k)
• Maximum saving: £8,750 on properties £500k-£625k
• Standard relief: Most FTBs buying at UK average (£272k) save £1,100
• Over £625k: No relief at all – pay standard rates
• Both buyers must be first-timers on joint purchases

What Is First-Time Buyer Stamp Duty Relief?

First-time buyer relief reduces or eliminates Stamp Duty Land Tax (SDLT) for eligible buyers purchasing their first home. Introduced to help people get on the property ladder, it can save you thousands compared to standard rates.

Standard vs First-Time Buyer Rates

Standard rates (home movers):

• £0-£250,000: 0%
• £250,001-£925,000: 5%
• £925,001-£1,500,000: 10%
• £1,500,001+: 12%

First-time buyer rates:

• £0-£425,000: 0% (£175k higher threshold!)
• £425,001-£625,000: 5%
• £625,000+: Standard rates (no relief)

How Much Can You Save?

The relief increases the 0% threshold from £250,000 to £425,000 – a massive £175,000 extension.

Property Price	Standard Duty	FTB Duty	Saving
£200,000	£0	£0	£0
£250,000	£0	£0	£0
£300,000	£2,500	£0	£2,500
£350,000	£5,000	£0	£5,000
£400,000	£7,500	£0	£7,500
£425,000	£8,750	£0	£8,750
£500,000	£12,500	£3,750	£8,750
£600,000	£17,500	£8,750	£8,750
£625,000	£18,750	£10,000	£8,750
£650,000	£20,000	£20,000	£0

Key insight: Maximum saving is £8,750 on properties between £425,000-£625,000. Properties over £625,000 receive NO relief.

Am I Eligible for FTB Relief?

To qualify, you must meet ALL these criteria:

✅ Requirement 1: Never Owned Property

You've never owned residential property anywhere in the world, including:

• Property in the UK
• Property abroad (any country)
• Inherited property (even a share)
• Property held in trust
• Property given to you

Joint purchases: BOTH buyers must be first-timers. If one person previously owned property, you lose ALL relief.

✅ Requirement 2: Property Price Under £625,000

The property must cost £625,000 or less. One penny over = no relief at all.

Example:

• £624,999: Get relief (save £8,750)
• £625,001: NO relief (pay £18,750)
• Difference: £27,500 for £2!

Negotiate hard if close to this threshold.

✅ Requirement 3: Intending to Live There

The property must be your main residence. Relief doesn't apply to:

• Buy-to-let properties
• Investment properties
• Holiday homes
• Properties you won't live in

You must move in within a reasonable time after completion.

✅ Requirement 4: Residential Property Only

Must be a residential home, not:

• Commercial property
• Mixed-use property (flat above shop)
• Land without property

Common Disqualifications

❌ You've Previously Owned Property

If you:

• Owned a property (even years ago)
• Inherited property and became legal owner
• Owned abroad (any country counts)
• Had your name on deeds (even without mortgage)

You don't qualify, even if you:

• Sold it years ago
• Never lived there
• Only owned a share
• It was worth very little

❌ Your Partner Owned Before (Joint Purchase)

On joint purchases, BOTH buyers must be first-timers.

Example:

• You: Never owned
• Partner: Owned property in 2018 (sold 2020)
• Status: No relief (your partner disqualifies you both)

Solution: Buy in your name only (if you can afford the mortgage solo).

❌ Property Over £625,000

No relief whatsoever on properties costing over £625,000.

Example:

• Buying £650,000 property
• You'd pay: £20,000 stamp duty
• FTB relief: £0 (over limit)
• Same as home mover rates

❌ Buy-to-Let or Investment

The property must be your main home. Buying to rent out? No relief.

Plus, you'd pay the 3% additional property surcharge on top!

Real Examples: What You'll Actually Save

Example 1: £280,000 First Home (Birmingham)

Your circumstances:

• First-time buyer
• Property: £280,000
• Deposit: £28,000 (10%)
• Mortgage: £252,000

Stamp duty:

• Standard rates: £1,500
• FTB relief: £0
• Saving: £1,500

That £1,500 saving can cover:

• Solicitor fees
• Survey costs
• Moving expenses

Example 2: £375,000 Flat (London)

Your circumstances:

• First-time buyer
• Property: £375,000
• Deposit: £37,500 (10%)
• Mortgage: £337,500

Stamp duty:

• Standard rates: £6,250
• FTB relief: £0
• Saving: £6,250

That's £6,250 more towards furniture, repairs, or emergency fund.

Example 3: £550,000 House (South East)

Your circumstances:

• First-time buyer
• Property: £550,000
• Deposit: £55,000 (10%)
• Mortgage: £495,000

Stamp duty calculation:

• First £425,000: 0% = £0
• Remaining £125,000: 5% = £6,250
• FTB duty: £6,250

Vs standard rates:

• First £250,000: 0% = £0
• Remaining £300,000: 5% = £15,000
• Standard duty: £15,000

Your saving: £8,750

Example 4: £625,000 Property (Threshold Limit)

Your circumstances:

• First-time buyer
• Property: £625,000
• Deposit: £125,000 (20%)
• Mortgage: £500,000

Stamp duty:

• First £425,000: 0% = £0
• Remaining £200,000: 5% = £10,000
• FTB duty: £10,000

Vs standard rates: £18,750 Your saving: £8,750 (maximum possible)

Example 5: £626,000 Property (Over Limit)

Your circumstances:

• Property: £626,000 (just £1,000 over threshold)

FTB relief: £0 (lose ALL relief!) Pay standard duty: £18,800 Vs £625k property: Pay £8,800 MORE

Lesson: Negotiate down to £625k or accept losing relief.

Joint Purchase Scenarios

Scenario A: Both First-Time Buyers ✅

• You: Never owned
• Partner: Never owned
• Result: Full FTB relief

Scenario B: One Previous Owner ❌

• You: Never owned
• Partner: Owned 2015-2019
• Result: NO relief (pay standard rates)

Scenario C: Buying Solo (Solution)

• You: Never owned
• Partner: Previously owned
• Solution: Buy in your name only
• Result: Get FTB relief
• Consideration: Can you afford mortgage solo?

Scenario D: Inherited Property ❌

• You: Inherited 20% of parent's property (now sold)
• Partner: Never owned
• Result: NO relief (you owned property, even inherited)

Applying for FTB Relief

Automatic Process

Your solicitor handles everything:

Step 1 (Before completion):

• Solicitor confirms you're eligible
• Calculates exact stamp duty
• You transfer funds to solicitor

Step 2 (Completion day):

• Property purchase completes
• Solicitor files SDLT return
• States you're claiming FTB relief

Step 3 (Within 14 days):

• Solicitor pays stamp duty to HMRC
• With FTB relief applied
• Usually £0 for properties under £425k

Step 4 (30 days later):

• HMRC issues certificate
• Solicitor registers property with Land Registry
• You're the legal owner

Your role: Confirm eligibility honestly. Lying to HMRC has serious consequences.

Scotland and Wales: Different Relief

FTB relief differs outside England/Northern Ireland:

Scotland: Land and Buildings Transaction Tax

FTB relief (Scotland):

• 0% up to £175,000 (vs England's £425,000)
• Only if property under £200,000
• Much less generous than England

Example: £350,000 property in Scotland

• FTB in Scotland: Pay £4,600
• FTB in England: Pay £0
• England saves £4,600 more

Wales: Land Transaction Tax

No specific FTB relief in Wales as of 2025.

First-time buyers pay standard LTT rates:

• £0-£225,000: 0%
• £225,001-£400,000: 6%

Example: £300,000 property in Wales

• FTB in Wales: Pay £4,500
• FTB in England: Pay £0
• England saves £4,500 more

Northern Ireland

Uses same system as England (SDLT rates and FTB relief identical).

Common Mistakes to Avoid

Mistake 1: Not Declaring Previous Ownership

Some buyers think:

• "I sold my old flat years ago – doesn't count"
• "I only owned 10% – doesn't matter"
• "It was abroad – they won't know"

Reality: HMRC can check and will find out. Penalties for false declarations:

• Pay stamp duty owed
• Interest charges
• Penalties up to 100% of duty
• Possible criminal prosecution

Mistake 2: Buying Just Over £625k

Example:

• Found perfect house at £630,000
• Didn't negotiate
• Lost ALL relief
• Paid £19,500 duty vs £10,000 if £625k

Solution: Always negotiate if close to thresholds.

Mistake 3: Joint Purchase Without Checking Partner

Example:

• You: First-timer
• Partner: "I think I've never owned"
• Later discover: Partner inherited share of property
• Result: No relief, surprise £7,500 bill

Solution: Check thoroughly before exchange.

Mistake 4: Buying Investment Property

Example:

• First-timer buying flat
• Plan to rent it out
• Claim FTB relief

Reality: Relief only for main residence. HMRC can:

• Reclaim relief
• Charge 3% surcharge
• Add penalties

Maximizing Your Stamp Duty Savings

Strategy 1: Target Properties Under £425k

Zero stamp duty on properties up to £425,000 = maximum saving on this price.

Benefit:

• No upfront stamp duty
• £8,750 more for deposit/furniture/emergency fund
• Lower monthly costs

Strategy 2: Negotiate Down from £625k+

If looking at £630-650k properties:

• Negotiate to £625k or below
• Save up to £8,750
• Use saving for conveyancing costs

Strategy 3: Buy Solo If Partner Owned Before

If only one of you is a first-timer:

• Buy in first-timer's name only
• Get full FTB relief
• Add partner to deeds later (no stamp duty on gift)

Considerations:

• Can you afford mortgage solo?
• Lender criteria
• Relationship implications

Strategy 4: Exclude Fixtures from Price

Negotiate separate price for removable items:

• Furniture
• Appliances
• Carpets
• Curtains

Stamp duty only applies to property value.

Example:

• Total: £426,000
• Property: £624,999
• Fixtures: £1,001
• Keep under £625k threshold!

Using Our Stamp Duty Calculator

Calculate your exact saving:

1. Enter property price
2. Select "First-time buyer"
3. See instant results:
   • Your stamp duty
   • Standard rates comparison
   • Exact saving amount
   • Eligibility check

Calculate FTB Stamp Duty →

Frequently Asked Questions

Q: I inherited my parents' house. Am I still a first-time buyer? A: No. Inheriting property makes you a property owner, even if you sold it immediately. You don't qualify for FTB relief.

Q: Can I buy with my partner if they owned before? A: You can buy together, but you'll lose ALL first-time buyer relief. Consider buying in your name only if affordable.

Q: What if I owned property abroad? A: You don't qualify. FTB relief requires never owning property anywhere in the world.

Q: Can I buy a £630k property with FTB relief? A: No. Properties over £625,000 receive NO relief at all. You'd pay standard rates of £19,500.

Q: How do I claim the relief? A: Your solicitor claims it automatically when filing your SDLT return. You just need to confirm you're eligible.

Q: Can I get FTB relief on buy-to-let? A: No. Relief only applies to properties you'll live in as your main home, not investments or rental properties.

Q: I owned with an ex-partner. Can I still claim? A: No. You've previously owned property, so you don't qualify for first-time buyer relief.

Q: What if I lie to get the relief? A: HMRC will find out (they have extensive property records). You'll pay the duty owed plus interest, penalties up to 100% of the duty, and risk prosecution.

Related Resources

• UK Stamp Duty Calculator - Calculate your exact duty
• Stamp Duty Complete Guide - All rates explained
• First-Time Buyer Deposit Guide - How much to save
• Mortgage Calculator - Monthly payments

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Official Sources:

• HMRC: Stamp Duty Relief for First-Time Buyers
• GOV.UK: Calculate Stamp Duty

Last updated: December 9, 2024
Disclaimer: FTB relief rules can change. Always verify eligibility with your solicitor before purchasing. Deliberately false declarations to HMRC constitute fraud. UK Calculator is not a solicitor or tax adviser.