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Stamp duty for first-time buyers: the £300,000 relief explained

Stamp Duty · 6 min read

First-time buyers get the most generous stamp duty break in the system — but it comes with a hard cut-off that catches people out. This guide explains exactly when you pay nothing, when you pay something, and the £500,000 cliff edge that can cost a first-time buyer thousands. Figures are for the 2025/26 tax year and cover Stamp Duty Land Tax (SDLT) in England and Northern Ireland. For the standard rules that apply to everyone, see our guide on how UK stamp duty works.

The first-time buyer relief in one line

As a first-time buyer you pay 0% on the first £300,000 and 5% on the portion between £300,001 and £500,000. If the property costs more than £500,000, the relief is switched off entirely and you pay the ordinary home-mover rates on the whole price.

  • Up to £300,000: no stamp duty at all.
  • £300,001 – £500,000: 0% on the first £300,000, then 5% on the rest.
  • Over £500,000: no relief — standard rates apply (0% to £125,000, 2% to £250,000, 5% to £925,000, and so on).

Worked examples

£280,000 home: the whole price is under £300,000, so a first-time buyer pays £0. A home mover on the same property would pay £4,000.

£425,000 home: 0% on the first £300,000 + 5% on the remaining £125,000 = £6,250. A home mover would pay £8,750 — so the relief saves £2,500.

£500,000 home: 0% on £300,000 + 5% on £200,000 = £10,000.

£510,000 home: relief is gone. Standard rates give £125,000 at 0%, £125,000 at 2% (£2,500) and £260,000 at 5% (£13,000) = £15,500. Paying £10,000 more for the property has added £5,500 in tax.

Work out your bill

Stamp Duty Calculator

Set the buyer type to "first-time buyer" and enter your price for an instant, band-by-band breakdown — including the moment relief drops away above £500,000.

Open the calculator →

Who actually counts as a first-time buyer?

The definition is stricter than most people expect. To qualify, you must never have owned a residential property anywhere in the world — and you must intend to live in the new home as your only or main residence. In particular:

  • Property abroad counts. A flat you own or co-own in another country disqualifies you, even if you've never lived in the UK before.
  • Inherited property counts. If you've inherited a share of a home — even one you never lived in and have since sold — you are no longer a first-time buyer.
  • A previous share counts. Owning any interest in a residential property, past or present, uses up your status. It doesn't reset.
  • Commercial property is different. Owning a shop or office (with no residential element) doesn't necessarily disqualify you, but the rules here are narrow — take advice.

Buying jointly: everyone must qualify

This is the single most common way people lose the relief. On a joint purchase, every buyer must be a first-time buyer. If you're buying with a partner who has owned a home before — even years ago, even abroad — the whole purchase is taxed at standard rates, not just their half. A common workaround people ask about is putting the property in the first-time buyer's name alone, but if the other person contributes to the mortgage or lives there, the picture gets complicated quickly; get proper advice before relying on it.

Shared ownership

First-time buyer relief can also apply to shared-ownership homes. You generally have two choices: pay stamp duty on the full market value of the property up front (a "market value election"), or pay only on the share you're buying now and again later if you staircase up. Which is cheaper depends on the price and whether you expect to buy further shares. On lower-priced shared-ownership homes the relief often wipes out the bill entirely, so it's worth checking both routes with your conveyancer.

Common mistakes

Budgeting as if relief is guaranteed. Above £500,000 it vanishes — a £510,000 flat carries a £15,500 bill, not £500.

Forgetting a co-buyer's history. One previous owner on the deeds removes the relief for everyone.

Overlooking overseas or inherited property. HMRC's test is worldwide and lifetime, not just UK and current.

Leaving it out of the cash plan. Whatever you owe is due within 14 days of completion and usually can't be added to the mortgage.

Related guides

Frequently asked questions

Do first-time buyers pay stamp duty?

Often not. A first-time buyer pays 0% on the first £300,000 and 5% on the portion from £300,001 to £500,000. A home costing £300,000 or less is completely free of stamp duty. If the property costs more than £500,000, the relief doesn't apply at all and standard rates are charged on the whole price.

Who counts as a first-time buyer for stamp duty?

You must never have owned a freehold or leasehold interest in a residential property anywhere in the world — including property abroad, inherited property, and a share in a property — and you must intend to live in the home as your only or main residence. On a joint purchase, every buyer must meet the test.

What happens if the property costs more than £500,000?

Relief is a cliff edge, not a taper. At £500,000 or below you get it; at £500,001 it disappears entirely and you pay standard home-mover rates on the whole price. Just above £500,000, a first-time buyer can pay thousands more than they would at exactly £500,000.

Do both people have to be first-time buyers?

Yes. On a joint purchase, every buyer must be a first-time buyer for the relief to apply. If one person has previously owned a home — even years ago, or abroad — the whole purchase is taxed at standard rates.

Do first-time buyers get relief on shared ownership?

Yes. You can either pay stamp duty on the full market value up front, or pay in stages on the share you buy. Which is cheaper depends on the price and your plans, so it's worth comparing both before you commit.