Stamp Duty for First Time Buyers

Purchases in Scotland are subject to Land and Buildings Transaction Tax (LBTT), which is currently under review and are due to change on the 1st April 2015. For more details please see our stamp duty calculator

If you’re buying a house for the first time, you may be new to stamp duty. It’s also known as ‘Stamp Duty Land Tax’ (SDLT) and you’ll have to pay it if you’re buying a property worth more than £125,000.

Read on to find out more about what exactly SDLT is, and how much stamp duty you can expect to pay as a first time buyer.

What is stamp duty?

If your new property costs more than £125,000, you’ll have to pay stamp duty on any flat or house that you buy – whether it’s freehold or leasehold.

The amount you have to pay will be a percentage of the purchase price and that percentage will depend on the value of the property (see the rates below).

It can add up to quite a considerable amount so it’s important to budget for this in advance.

You can use London & Country’s stamp duty calculator to work out how much you can expect to pay. Simply enter the purchase price of your property and the calculator will do the rest.

Do first time buyers pay stamp duty?

Between 2010 and 2012, there was no stamp duty for first time buyers unless their properties were worth more than £250,000.

However, the rules have since changed and there is no longer a stamp duty exemption for first time buyers. They are now subjected to the same rates as other property buyers, which you will find in the section below.

Stamp duty rates for first time buyers

First time buyers will pay stamp duty on properties over the value of £125,000 - just like everyone else.

It’s calculated as a percentage of your property value over a £125,000 threshold and increases with the value of the property.

Here are the current stamp duty rates:

  • No tax on the first £125,000 paid
  • 2% on the portion up to £250,000
  • 5% on the portion up to £925,000
  • 10% on the portion up to £1.5 million
  • 12% on everything over that
(Rates correct at time of writing – Dec 2014)

Our stamp duty calculator will work out the amount you will need to pay

When do first time buyers have to pay stamp duty?

Whether you’re buying your first house or your third house, you have 30 days from the date of completion to pay your stamp duty.

The date of completion is the day all the contracts have been signed and dated – and usually the day when you get the keys to your new home. In most cases, your solicitor or conveyancer will take care of paying the stamp duty on your behalf and they should confirm this for you. If you take longer than 30 days, you could be subjected to a fine and you may even have to pay interest on top.

First time buyers stamp duty relief

There is no first time buyers stamp duty relief.

Since the first time buyer exemption was removed 2012, all property buyers pay the same SDLT rates.

However, there are still some situations where you won’t have to pay SDLT. These include:

  • A divorce or separation where one partner is transferring their share of the property to the other
  • If the property is a gift
  • If the property is left in a will
You’ll find more information about stamp duty exemptions on the HMRC website.

And if you only just fall into the next stamp duty threshold, you could try to reduce the amount you need to pay by asking the seller or estate agency to consider a slightly lower price.

Stamp duty is just one of the additional fees you’ll need to pay when you buy a house. To find out more about the other additional costs, read London & Country’s guide to the cost of buying a house


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