Stamp duty in plain English

Stamp Duty Land Tax (SDLT) is a tax paid by the buyer when property or land changes hands in England and Northern Ireland. It is based on the price you pay, not on your mortgage size, and it is normally collected for you by your solicitor or conveyancer as part of the completion process. Scotland and Wales run their own equivalents, so the figures below apply to England only.

A few things often trip people up. SDLT is triggered by completion, not by exchange of contracts, so if the rules change between the two, it is the completion date that counts. It applies to leasehold as well as freehold purchases. It generally does not apply to property you inherit, to gifts, or to most transfers between spouses and civil partners. And it is calculated on the total chargeable consideration — so if you are buying a home with a parking space or a share of freehold included in the price, that is part of the sum.

Who counts as a first-time buyer

HMRC is stricter than most people expect. You are a first-time buyer only if you have never owned a residential property anywhere in the world, whether solely or jointly. That includes a flat you bought abroad, a share inherited from a relative, and a property you owned with an ex-partner and later sold.

To claim the relief, all of the following must be true:

• You have never owned a residential property, anywhere.
• The property will be your only or main home — not a buy-to-let or a second home.
• Every person named on the purchase is also a first-time buyer.
• The purchase price is within the relief's price ceiling.

That last point about joint purchases catches people out. If you are buying with a partner who owned a flat a decade ago, the relief is lost for the whole transaction. It is worth checking before you make an offer, not after.

How first-time buyer relief works

For purchases completing on or after 1 April 2025, first-time buyer relief gives you:

• Nothing to pay on the first £300,000 of the purchase price.
• 5% on the portion from £300,001 to £500,000.
• No relief at all if the price is over £500,000 — standard rates then apply to the entire price.

For comparison, the standard residential rates are 0% up to £125,000, 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million, and 12% above that. Thresholds do change at Budgets and have moved more than once in recent years, so confirm the current bands with your solicitor before you exchange.

Two quick sums

Buying at £350,000 as a first-time buyer. You pay nothing on the first £300,000, then 5% on the remaining £50,000. Your bill is £2,500.

Buying at £510,000 as a first-time buyer. Because the price exceeds £500,000, no relief applies. You pay 2% on £125,001–£250,000 (£2,500) plus 5% on £250,001–£510,000 (£13,000), giving £15,500.

That second example shows why the £500,000 cliff edge matters so much. Crossing it by a pound can cost you thousands. If you are negotiating close to that line, it is often worth pushing for a price at or below £500,000, or asking the seller to include fixtures and fittings within the agreed figure rather than as a separate payment.

Filing, deadlines and penalties

You have 14 days from completion to file an SDLT return and pay any tax due. This is a short window and it is measured from completion day, so weekends and bank holidays count. In practice your conveyancer handles it and includes the cost in their completion statement, but the legal responsibility ultimately sits with you.

The 14-day deadline applies even when no tax is payable, in many leasehold purchases — for example where you pay rent as well as a premium. Late filing penalties start at £100, rise if you are more than three months late, and interest accrues on any unpaid tax. If you are buying with someone else and the return needs amending later, it is far easier to sort out promptly than months down the line.

Two further surcharges are worth knowing about, even if they do not apply to most first-time purchases. An additional 5% applies if you own another property anywhere in the world and are not replacing your main home. A 2% surcharge applies to non-UK residents buying residential property. Both are on top of the standard rates.

Budgeting before you commit

Do not treat stamp duty as an afterthought once your offer is accepted. Build it into your deposit planning from the start, alongside legal fees, searches, survey, lender valuation and removal costs.

• Use the price bands to work out your likely bill early, then check it with your solicitor once the price is agreed.
• Remember that your Lifetime ISA bonus can go towards the deposit and the tax, but check the withdrawal rules before you touch it.
• If you are close to £500,000, model both scenarios — the saving from staying under the threshold can be thousands of pounds.
• If one buyer has owned before, assume no relief applies and budget accordingly.
• Ask your conveyancer to confirm the SDLT figure in writing before you exchange, not at completion.

Get these numbers straight early and the rest of your first purchase will feel considerably less daunting. A good solicitor will run the calculation as a matter of routine — just make sure you ask.