Stamp duty for first-time buyers
Buying your first home can be an exciting step. When you’re looking for a property, though, you may want to bear in mind that the costs aren’t limited to the price of buying the place. There are other costs and fees that you’ll need to consider. Knowing what these are can help you to budget for your home purchase.
One of these costs is Stamp Duty Land Tax (SDLT), which is a tax on your property or land in England and Northern Ireland. How much you’ll have to pay depends on a number of factors, like the price of your home, and whether you’re a first-time buyer.
Who qualifies as a first-time buyer?
The answer to the question ‘Am I a first time buyer?’ is straightforward. You’re a first-time home buyer if this is the first property that you’re buying to live in.
Help and information for buying your first home
You can find some resources here. The article points you in the direction of some of the things that first-time home buyers need to know, including first home checklists. There’s also information for first-time home buyers in the Equifax Homebuyer’s Handbook, which also explains the budgeting and mortgage process for anyone buying a home.
Are first-time home buyers exempt from buying stamp duty?
Yes, to an extent. You don’t have to pay stamp duty on homes that cost up to £300,000, and are exempt on paying some stamp duty for homes that cost up to £500,000. The rules for first-time buyers are different, which means that there are different rates of stamp duty on second homes and stamp duty on new builds.
What are stamp duty rates for first-time home buyers?
If you’re purchasing a home for the first time, you don’t need to pay stamp duty up to the first £300,000 of your property. After that, you’ll have to pay 5% on the portion from £300,001 to £500,000. If your home costs over £500,000, though, you won’t be qualify for exemption from stamp duty, and will have to pay the standard stamp duty rates.
For example, if you’re buying your first home for £350,000, this is what you’ll have to pay on stamp duty1:
- 0% on first £300,000 = £0
- 5% on next £50,000 = £2,500
- Total stamp duty charge = £2,500
If you’re planning on applying for a mortgage to buy your first home, you may want to check your Equifax Credit Report & Score beforehand. Free for the first 30 days then £7.95 monthly, the credit report shows you your borrowing history, while the score gives you an indication of how creditworthy a lender may find you.
- What is a mortgage broker?
- How much can I borrow for a mortgage?
- What is a tracker mortgage?
- Getting a second mortgage and buying a second home
- What does freehold mean?
- What credit score is needed for a mortgage?
- What is a 95% mortgage?
- Stamp duty on new builds
- Stamp duty on second homes and buy-to-let properties
- Stamp Duty Land Tax (SDLT) explained
- What to do if you’ve been rejected for a mortgage
- What is a mortgage?
- Can you apply for a mortgage with credit card debt?
- What to ask estate agents when purchasing a property
- Can I apply for a mortgage in retirement?
- What is porting a mortgage?
- What is a joint mortgage?
- Offset mortgages explained
- What is a mortgage in principle?
- What’s a mortgage deposit?
- Purchasing property with friends
- Costs and fees to consider when you’re buying a home
- Getting a no deposit mortgage with bad credit
- Do you have Right to Buy on your council home?
- Saving for a mortgage deposit
- What is a mortgage interview?
- How do credit scores affect mortgages?
- What to consider when applying for a mortgage if you’re self-employed
- Buying property – what is conveyancing?
- Buying a property – what is gazumping?
- Types of home improvement loans
- What happens to a mortgage after death?
- Getting credit-ready before applying for a mortgage
- How do mortgage applications work?
- Selling property – what to ask estate agents
- Selling property – estate agents vs doing it yourself
- Buying a leasehold property
- Help to Buy: equity loan
- London Help to Buy
- Mortgages for self build and custom build homes
- Help to Buy: Shared Ownership
- What is a Help to Buy: ISA?
- Resources for first-time buyers
- Buy-to-let mortgages explained
- What is remortgaging?
- How mortgage repayments work
- Understanding Mortgages
- Types of Mortgages
- Mortgage rates & decision
- Homebuyer's guide