Everything That First Time Buyers Need to Know About Stamp Duty

If you are buying your first home in the UK, and the purchase price that you agree with the seller exceeds £125,000, you will be required to pay a cost known as ‘stamp duty’.


It was announced in the Autumn Budget 2017 that stamp duty charges were to be abolished for all future first time buyers that met the criteria, with immediate effect. Previous to the new stamp duty rules, there were no exemptions for first time buyers, as all buyers were liable to pay stamp duty on homes with a purchase price of over £125,000.

The abolishment of stamp duty has made the process of buying a first home easier and more affordable for first time buyers, as up to £5,000 has now been wiped off the cost of getting on the property ladder. In this blog post we’ll look at what first time buyers need to know about stamp duty, reflecting the changes announced in the 2017 Budget.

What is stamp duty, and what does it pay for?

Stamp duty land tax is a payment to the Government, in order to obtain a Certificate of Land Ownership from the HM Revenue & Customs, which states that the land on which your new property sits is legally and officially owned by and registered to you.

If you are liable to pay stamp duty but don’t pay it, you won’t be allowed to officially purchase your new home.  So you should discuss with your solicitor whether you will need to pay stamp duty on your first home, and how much it will be, so you can ensure that you factor in this cost and don’t miss the payment deadline – which we will explain below.

How much stamp duty will I need to pay?

Following the changes announced in the Autumn Budget 2017, first time buyers must only pay stamp duty on all homes that are purchased for over £300,000. The definition of a first time buyer is someone who has never owned a property before, and if you are buying your first home with another person they must also be a first time buyer. You don’t qualify as a first time buyer if you have owned and sold a property, and are now renting.

If you are buying your first home for a price of £300,000 to £500,000, you will not pay stamp duty on the first £300,000. The normal rates of stamp duty for all buyers apply to the price above that. No stamp duty relief will apply on purchases of properties with a cost of over £500,000.

At the time of writing this blog post (November 2017), the below stamp duty thresholds and rates apply to the purchase of residential properties and land in England, Wales and Northern Ireland, however stamp duty is set to be replaced in Wales in 2018. In Scotland, you pay Landing and Buildings Transaction Tax (LBTT) instead of stamp duty.


Purchase Price

Stamp Duty Rate

Up to £300,000


The next £635,000 (the portion from £300,000 - £925,000)


The next £575,000 (the portion from £925,001 - £1,500,000)


The remaining amount*


*Example: If you buy a house for £475,000, the Stamp Duty Land Tax you owe is calculated as follows:

  • 0% on the first £300,000 = £0
  • 5% on the next £175,000 = £8,750
  • Total Stamp Duty Land Tax owed = £8,750

When does stamp duty need to be paid, and how do I pay it?

Where stamp duty charges apply, you must pay within 30 days from the date of completion of the purchase of your first home – when the contracts are signed and dated, and you have your keys. Your solicitor will typically arrange the payment of stamp duty for you, often before your purchase is completed, however it’s your legal responsibility to ensure that your stamp duty is paid.

If your stamp duty isn’t paid within the required 30 days, you may be fined and even charged interest on the outstanding cost, so it’s really important not to leave it until the last minute!

What are the rules around stamp duty on new builds?

If the property you are buying for your first home is a new build, stamp duty will be payable on the price you are paying for your new home (if it exceeds £300,000), which will include fixtures and fittings that are ‘attached’ to the building – for example, kitchens and fitted wardrobes. You may find that many house builders offer incentives to buyers which can help to cover the cost of stamp duty.

Can I add stamp duty to my mortgage?

It’s not possible to add the cost of stamp duty to your first time buyer mortgage. If the value of the property you want to buy exceeds £300,000, you’ll need to factor in the cost of stamp duty along with how much you have for a deposit, and how much you want to borrow for your mortgage.

For all of our useful guides and tools to help you on your journey to buying your first home, visit our First Time Buyers page. To compare the different types of mortgage deals that are currently available, get in touch with one of our mortgage advisers to begin your mortgage application process.

Your mortgage will be secured on your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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