If you’re buying a home for the first time, you may need to budget for stamp duty. This is undoubtedly one of the more considerable expenses in your new home purchase.
Stamp Duty Land Tax (SDLT) is a one-off tax that must be paid when buying a UK property costing more than a certain threshold. The amount of SDLT you pay depends on the purchase price of the property and whether you have already owned a property.
The SDLT 0% tax threshold for first-time buyers was reduced to £300,000 in April 2025. This means that buying property in south west London in areas such as Wimbledon, Mayfair and Wimbledon Village, where property prices are higher than average, will more than likely be subject to SDLT.
Read on to find out more about stamp duty relief for first time buyers and how the tax is calculated.
The government introduced first time buyer tax relief in 2017 to help more people onto the housing ladder. However, the tax-free threshold was reduced in April 2025 from £425,000 to £300,000, meaning more first time buyers will now pay stamp duty tax.
According to data from the UK House Price Index, the average house price in England was £265,497 as of April 2025. In areas of England where house prices are lower, such as the north west of England, many first time buyers won’t have to pay stamp duty tax. However, for first time buyers purchasing properties priced over £300,000, there will be stamp duty to pay – which includes the vast majority of people in SW London.
The higher the property price, the higher the amount of stamp duty, so it is important to factor in the tax when calculating affordability and working out the house price range to be looking at.
Stamp duty must be paid when you buy property to live in – or land – in England and Northern Ireland. In Scotland, the equivalent of SDLT is the land and buildings transaction tax and the tax rates are different.
In England and Northern Ireland, the standard rate of stamp duty is due on property that costs more than £125,000. The rate at which you pay stamp duty depends upon the purchase price.
However, different rules apply for first-time buyers, as there is a relief to help make properties more affordable for people who have never owned a property. There is also an additional stamp duty levy for people buying a second property.
First-time buyers in England and Northern Ireland, purchasing residential properties costing up to £300,000, have no stamp duty to pay. First-time buyers purchasing a property over £300,000 up to £500,000 pay 5% (on the portion over £300,000).
If the purchase price of the property you are buying as a first-time buyer exceeds £500,000 then you won’t get any buyer relief. Instead, you will pay the same stamp duty as someone buying a home for the second, third, etc. time.
Stamp duty rates for first-time buyers:
Are you wondering about the first-time buyer definition? The simple definition of a first-time buyer is someone who is buying a property and has not owned a property before. It sounds pretty straightforward, but there are some scenarios where it is not as easy to determine whether someone qualifies as a first-time buyer.
For example, you will not be considered a first-time buyer if you have owned or inherited a property before or if you have been named on the deeds of another property.
Nor will you be eligible if you are married and your spouse has bought a property in the past, even if you have never been the owner of a property in your own right.
If you are purchasing a buy-to-let property, you won’t be considered a first-time buyer either, even if you haven’t owned property before – although you are allowed to rent out a room in your home.
This depends on whether you or your spouse has owned a property before. If you previously owned a property and sold it, you would not qualify for first-time buyer relief. If you have ever had your name on a property deed before, you will not receive the first-time buyer stamp duty relief.
If you inherited a property this is classed as owning a property. Therefore you would not be entitled to first-time buyer relief under the definition set by the government.
No, it does not matter where in the world you own a property. If you have owned a property overseas or anywhere in the UK, you will not qualify for first-time buyer stamp duty tax exemption.
No, to qualify for stamp duty relief, none of the buyers can have previously owned or inherited a residential property. This applies to both married and unmarried couples.
No, the first-time buyer stamp duty only applies when buying a home that you will live in and is your main residence. If you purchase a property to rent it out, then you will not qualify for first-time buyer stamp relief and you’ll pay the standard stamp duty rate.
If you buy a property under a shared ownership scheme and you’re a first time buyer, there are different rules. If the full value of the property is less than £300,000 then you’ll pay no stamp duty as a first time buyer.
However, if your property value is over £300,000 then you have the option to pay SDLT on the full property upfront or you can pay SDLT on your share of the property. If you later buy a higher share in the property, further SDLT would be due. However, the next payment for stamp duty would not be until you own 80% or more of the property.
Stamp duty is levied as a percentage of the property price, so the higher the value of the property you buy, the higher rate of stamp duty you will have to pay.
Stamp duty rates as of April 2025:
You can work out exactly how much you will need to pay by using a stamp duty calculator.
There is a surcharge of 5% on top of the standard stamp duty rate when you buy a buy-to-let property or second home. These are the buy-to-let stamp duty rates in England and NI depending on property price:
In addition to the buy-to-let stamp duty surcharges, property investors or other types of overseas buyers must pay an extra 2% stamp duty surcharge.
It is possible to add stamp duty to your mortgage if your lender agrees. But it doesn’t make financial sense to add it to your mortgage if you have another option. That’s because you could end up paying around £8,500 interest on stamp duty of £5,000.
If the mortgage is taken out over 25 years (and most mortgages are), then that’s an awful long time to pay interest on £5,000.
Adding stamp duty costs to your mortgage will probably also affect your loan-to-value ratio, which means you may not qualify for a mortgage after all.
Stamp duty on property purchases in England or Northern must be paid within 14 days of the completion date and picking up the keys to your new home. It’s essential to pay the duty within this period – otherwise you could be facing a fine, with interest added to the original sum.
In most cases, the solicitor carrying out your conveyancing will pay the tax on your behalf at completion and add the amount to their fees. They will also claim any stamp duty relief you’re eligible for, such as relief for first-time buyers. However, it is your responsibility to ensure that the stamp duty is paid.
If you are looking to buy property in Wimbledon, Coombe, Putney or surrounding areas, contact us. We can advise you about reduced stamp duty as well as other aspects of your house purchase and show you our current selection of properties.
Let us know what you are looking for in your new home and we will tailor our search to your requirements.
Book a quick phone consultation with one of our negotiators.
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