Buying a house for the first time can seem daunting, especially if you’re unsure what you’re letting yourself in for.
After all, there’s a lot to consider.
Stamp duty, or Stamp Duty Land Tax (SDLT) to use its full title, is one element of a purchase that first-time buyers need to understand.
Let’s start by answering; how much stamp duty does a first-time buyer pay?
What is stamp duty?
Stamp duty, or SDLT, is a tax applied to a residential property or land purchase in England and Northern Ireland.
The amount of stamp duty that you pay is calculated using the purchase price of a property, not the amount you’re borrowing through a mortgage.
Do first-time buyers pay stamp duty?
In short, yes, they do!
However, stamp duty can seem confusing when it’s your first purchase.
Indeed, there are different rules and stamp-duty exemptions for first-time buyers, who will only need to pay tax if the property’s value is above a certain threshold.
If you, and anyone you’re buying with, are a first-time buyer of a residential property in England or Northern Ireland, you can claim relief if both of the following apply:
- you intend to occupy the property as your main residence
- the purchase price is less than £625,000
You’ll pay:
- 0% on the first £425,000
- 5% on the remainder up to £625,000
If the purchase price is more than £625,000, you cannot claim the relief and instead must pay the standard stamp duty rates.
These figures are accurate at the time of writing in June 2024.
To read more about stamp duty tax relief, read the Government’s guidance here.
The motivation for providing tax relief for first-time buyers is to encourage more people to own homes and also to reduce the upfront costs incurred with buying a property.
When do first-time buyers pay stamp duty?
Once you’ve bought your new home, you’ll need to file a stamp duty land tax return and pay the amount due within 14 days in England and Northern Ireland.
If you don’t, then you’ll be charged penalty fees by HMRC.
In most cases, a solicitor or conveyancer helping with the purchase will do this on your behalf.
However, check carefully whether they offer this service in plenty of time to avoid the risk of a late filing penalty.
If you’re liable to pay stamp duty, you’ll have to do so when you have bought the property.
This signifies that the transaction is legally complete and that you’re officially the new owner.
Still unsure on the rules? Then we’d encourage you to arrange a consultation today with one of our trained mortgage advisors who will be happy to answer any questions you have about buying a property for the first time.
Put your trust in UKMC today
Whether you’re wondering ‘how much stamp duty do first-time buyers pay?’, or simply want to know more about what to look out for when buying your first property, we can help.
We possess the know-how to ensure first-time buyers understanding the risks, costs, and criteria associated with buying a home, accessing an extensive network of lenders to identify a product that is most appropriate for their circumstances.
We understand that searching for a first-time buyer mortgage can feel overwhelming at first, process, which is why we commit to explaining complex arrangements in simple, easy-to-follow language.
So, if you want to know more about stamp duty or you are searching for your first property, why not arrange a consultation today?
The process of getting started is simple; simply book a call with an expert team member.
If can’t schedule an appointment immediately, you have the option of requesting a callback at a more convenient date and time.
To get started with UKMC, you can also fill out our online contact form.
Disclaimer
UK Mortgage Centre Limited is an Appointed Representative of Refresh Mortgage Network Limited. Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register under firm number 1019794.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
The Financial Conduct Authority does not regulate will writing and taxation and trust advice.
You may be charged a fee for your advice. A typical fee is £495, which would be payable when you receive your mortgage offer. Your dedicated advisor will discuss this further on your free initial phone call.
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