We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.

Stamp duty slashed for 69,000 first-time buyers

New relief has saved first steppers £2,300 on average. Here’s how to take advantage.

Stamp duty slashed for 69,000 first-time buyers

HMRC has revealed that 69,000 first-time buyers have benefited from the new stamp duty rules introduced in the Autumn Budget last year.

Since 22 November 2017, those taking their first steps onto the property ladder have saved £2,300 on average, while those buying in London have seen almost double the discount with a typical saving of £4,300.

Which? explains how the first-time buyers’ stamp duty relief works, who qualifies and how much you can save.


Why are first-time buyers getting a stamp duty discount?

First-time buyers’ stamp duty relief was implemented on 22 November 2017 by the government, in a bid to relieve the financial challenges facing aspiring homeowners.

The new thresholds mean those buying a first home worth £300,000 or less are now exempt from paying stamp duty. And those buying a starter pad worth between £300,000 and £500,000 get a reduced bill, paying 5% on the remainder above the tax-free amount.

The new system means first-time buyers can save up to £5,000 on their stamp duty bills, compared with the rates that used to apply (and still do for other homebuyers).

The table below sets out the savings.

First-time buyers that purchase properties over £500,000 will not qualify for the relief and pay the standard rates of stamp duty.

Where are first-time buyers saving the most?

In the four months since the stamp duty relief was introduced, an estimated £159m worth of relief has been claimed in total, new HMRC figures show.

Buyers in London and the South East, where house prices are typically higher, cashed in on the biggest chunk of the relief, claiming £40m and £38m, respectively.

On average, first-time buyers in London saved the most, pocketing £4,300. By contrast, those buying in Northern Ireland made the lowest average saving at £800.

Paying no stamp duty vs getting a discount

Of the 69,000 that claimed first-time buyers’ stamp duty relief, the majority (54,600) bought homes worth under £300,000. These buyers would have been able to skip paying stamp duty altogether.

The South East had the highest number of buyers claiming relief for their entire stamp duty bill, at 9,000.

The remaining 14,400, who bought properties worth between £300,001 and £500,000, paid 5% on the portion above the tax-free amount, saving up to £5,000.

Unsurprisingly, London had the highest number of buyers claiming the 5% relief, with 6,100.

Can you save with first-time buyers’ stamp duty relief?

You’ll qualify for the first-time buyers’ stamp duty relief so long as you have never owned a property before and you’re buying in England or Northern Ireland.

You must also be planning to use the property as your main residence, so you won’t be able to claim if you plan to let it out or use it as a holiday pad.

Those living in Wales were able to benefit from the stamp duty relief for first-time buyers up until April 2018, when the tax was replaced with Land Transaction Tax (LTT).

In Scotland, homebuyers are liable for Land and Buildings transaction Tax (LBTT) which does not offer first-time buyer relief.

Wherever you are thinking of putting down roots, we have a range of calculators that can help you calculate your stamp duty bill.

You can use our LBTT calculator if want to figure out the stamp duty you will pay in Scotland, our LTT calculator if want to work out the bill for a property in Wales or our stamp duty calculator if you’re thinking of buying a home in England or Northern Ireland.

Back to top
Back to top