Do first-time buyers pay stamp duty?

Getting onto the property ladder is incredibly pricey, with additional costs making it even more expensive.

One of these additional upfront payments that first-time buyers may have to pay for is stamp duty.

However, the exact amount a buyer must pay depends on the price and type of property.

You only pay once you reach a certain threshold, which is currently €425,000.

Originally it was less than this, as we explain below.

If you buy a home for less than this amount, you do not have to pay tax as a starter.

However, the rules will change again in 2025 – we explain everything below.

What is stamp duty and who has to pay it?

Stamp duty land tax (SDLT) is a lump sum you have to pay when purchasing a property above a certain threshold.

Home buyers always pay stamp duty, not the seller.

This is often done on your behalf through a lawyer as part of the purchasing process.

Home buyers have 14 days from the date of purchasing a property to lodge a return with HMRC, with any stamp duty due.

What are the rules for starters?

Not everyone pays the same amount of stamp duty.

If you are a first-time buyer, you can get a discount if the following applies to you:

• You, and everyone else you make a purchase with, are starters
• The purchase price is £625,000 or less

You pay the tax if you:

The rate a buyer must pay depends on the price, the type of home and whether he or she already owns a home.

How have the rules changed recently?

Since September 2022, first-time buyers on homes costing less than £425,000 will not have to pay stamp duty.

They only have to pay it for properties that cost more.

This amount previously stood at £300,000 but was increased by then Chancellor Kwasi Kwarteng.

The maximum value of a property for which a first-time buyer exemption can be claimed has also increased from £500,000 to £625,000.

Under the previous system, no stamp duty was paid on the first £125,000 of all property purchases, but the government has doubled that to £250,000.

The change in thresholds ends on March 31, 2025.

Have the rules changed during Covid?

The government previously introduced a stamp duty exemption for homes worth up to £500,000 during the Covid pandemic.

The goal was to give buyers a break and bring some energy back into the real estate market.

Stamp duty then reverted to the previous rules in September 2021.

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