Who counts as a first-time buyer
For Stamp Duty you are a first-time buyer only if:
- you have never owned a home, or a share of one, anywhere in the world;
- you are buying the home to live in as your only or main residence; and
- everyone buying with you meets the same tests.
"Owned" includes inherited homes, homes held in a trust for you in some cases, and homes owned abroad. It also includes a home you once owned with a former partner, even if you sold it years ago. Shared ownership counts too: if you have ever owned a share, you are no longer a first-time buyer.
Owning a buy-to-let as your only property also rules you out, because you have owned a residential property. Having had a mortgage is not the test; owning is.
First-time buyer rates
| Part of the price | Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
These rates have applied since 1 April 2025 and are unchanged for 2026/27. They replaced a temporary scheme that ran the 0% band to £425,000 and allowed relief up to £625,000. If the price is above £500,000, first-time buyer relief does not apply at all, and you pay the same standard rates as a home mover.
A worked example
- First £300,000 at 0%£0
- Next £50,000 at 5%£2,500
A home mover buying the same house would pay £7,500, so relief saves £5,000. If the price were £300,000 or less, a first-time buyer would pay nothing.
The £500,000 cliff edge
Relief is all or nothing. At £500,000 a first-time buyer pays £10,000. At £500,001 the relief disappears and the standard rates apply to the whole price, so the bill jumps to £15,000.
| Price | First-time buyer pays | Rates used |
|---|---|---|
| £480,000 | £9,000 | First-time buyer |
| £490,000 | £9,500 | First-time buyer |
| £500,000 | £10,000 | First-time buyer |
| £500,001 | £15,000 | Standard |
| £510,000 | £15,500 | Standard |
| £520,000 | £16,000 | Standard |
An extra £1 of price can cost £5,000
If you are close to £500,000, negotiating the price down to £500,000, or legitimately separating furniture and fittings at a fair value, can be worth thousands. The chart in the calculator shows the jump.
How much relief saves
Relief is worth most between £300,000 and £500,000, where it saves a flat £5,000.
| Price | Home mover | First-time buyer | Saving |
|---|---|---|---|
| £150,000 | £500 | £0 | £500 |
| £200,000 | £1,500 | £0 | £1,500 |
| £250,000 | £2,500 | £0 | £2,500 |
| £300,000 | £5,000 | £0 | £5,000 |
| £350,000 | £7,500 | £2,500 | £5,000 |
| £400,000 | £10,000 | £5,000 | £5,000 |
| £450,000 | £12,500 | £7,500 | £5,000 |
| £500,000 | £15,000 | £10,000 | £5,000 |
| £550,000 | £17,500 | £17,500 | £0 |
Buying with someone else
Every buyer must be a first-time buyer. If you buy with a partner who has owned a home before, neither of you gets the relief. You pay the standard rates instead, as long as the home replaces any home your partner owns and they have sold it.
If your partner still owns another home on the day you complete, the 5% higher rates for additional properties may apply instead. Married couples and civil partners are treated as one for that test.
A parent can give you money for the deposit without affecting your relief, because they are not buying. If a parent is named on the title as a joint owner and already owns a home, relief is lost and higher rates may apply. A guarantor mortgage, where a parent guarantees but does not own, does not affect it.
The full cost of buying
Stamp Duty is only part of what you pay to buy. A realistic budget for a £350,000 first home with a 10% deposit:
- Deposit at 10%£35,000
- Stamp Duty£2,500
- Legal fees and searchesTypical range £1,200 to £2,000£1,500
- SurveyLevel 2 survey£500
- Mortgage arrangement feeSome deals have none£500
On top of this, budget for removals, basic furniture, and buildings insurance from exchange of contracts. Our moving house budget calculator covers these.
Deposits and loan to value
Loan to value (LTV) is the mortgage as a share of the price. Lenders set rates in bands, usually at 95%, 90%, 85%, 80%, 75% and 60% LTV. A bigger deposit puts you in a lower band and usually a cheaper rate.
| Deposit | Amount | Mortgage | LTV |
|---|---|---|---|
| 5% | £17,500 | £332,500 | 95% |
| 10% | £35,000 | £315,000 | 90% |
| 15% | £52,500 | £297,500 | 85% |
| 25% | £87,500 | £262,500 | 75% |
Stamp Duty does not depend on your deposit or mortgage. It is worked out on the price alone, so a cash buyer and a buyer with a 95% mortgage pay exactly the same.
Lifetime ISAs
A Lifetime ISA lets you save up to £4,000 a year, with a 25% government bonus of up to £1,000 a year, towards a first home. You must open it between ages 18 and 39.
- Price
- £450,000 or less
- Account age
- Open 12 months or more
- Buyer
- First-time buyer
- Paid
- To your conveyancer
- Over £450,000
- 25% withdrawal charge
- Charge
- Takes back more than the bonus
- Timing
- Allow time for the transfer
- Joint buyers
- Each can use their own
The £450,000 Lifetime ISA limit is lower than the £500,000 Stamp Duty limit. If you are buying between the two, you get Stamp Duty relief but cannot use your Lifetime ISA without the charge.
Scotland and Wales
Stamp Duty applies in England and Northern Ireland. Scotland and Wales have their own taxes:
- Scotland (LBTT): first-time buyers pay nothing up to £175,000 and the normal rates above. Relief is worth up to £600 and has no price cap.
- Wales (LTT): no first-time buyer relief, but everyone buying an only home pays nothing up to £225,000.
| Price | England & NI | Scotland | Wales |
|---|---|---|---|
| £200,000 | £0 | £500 | £0 |
| £300,000 | £0 | £4,000 | £4,500 |
| £400,000 | £5,000 | £12,750 | £10,500 |
| £500,000 | £10,000 | £22,750 | £18,000 |
Shared ownership and new builds
Shared ownership. You can pay Stamp Duty on the share you buy, or elect to pay it on the full market value up front. First-time buyer relief can apply either way if the full market value is £500,000 or less. Our shared ownership calculator compares both.
New builds. The rates are the same as for older homes. If a developer offers to pay your Stamp Duty, the tax is still worked out on the price, and the incentive may need declaring to your lender.
Buyers from abroad
If you have not been in the UK for at least 183 days in the 12 months before buying, a 2% surcharge applies on top of the rates you would otherwise pay. You can still claim first-time buyer relief if you qualify, so a non-resident first time buyer at £350,000 pays £2,500 plus 2% of the whole price (£7,000): £9,500 in total.
If you become UK resident within a year of buying, you may be able to claim the surcharge back.
Claiming relief and paying
- Before exchangeConfirm you qualify
Your conveyancer will ask about every property you or any co-buyer have owned.
- Before completionSend the money
Stamp Duty is paid from your own funds, alongside your deposit.
- Within 14 daysReturn filed and tax paid
Your conveyancer files the SDLT return, claims the relief and pays HMRC.
A return is needed even if no tax is due. HMRC can check claims for up to four years, and if you were not eligible you will owe the difference plus interest and possibly a penalty.
Buying your first home, step by step
- 1Work out your budget
Use our affordability calculator to see what you could borrow, then add your deposit and the costs of buying.
- 2Get a decision in principle
A lender or broker confirms roughly what they would lend. Agents often ask for one before accepting offers.
- 3Make an offer
Once accepted, instruct a conveyancer and apply for your mortgage.
- 4Survey and searches
The lender values the home; you can commission a survey. Your conveyancer runs local searches and checks the title.
- 5Exchange contracts
You pay a deposit and the purchase becomes legally binding. Arrange buildings insurance from this date.
- 6Complete
The money is transferred, you get the keys, and your conveyancer files the Stamp Duty return.
In England a purchase typically takes three to four months from offer to completion, though it can be quicker when there is no chain above you.
Mortgages for first-time buyers
Most lenders offer mortgages with a 5% deposit, and some have products designed for first-time buyers, such as longer terms or higher income multiples. A smaller deposit usually means a higher rate, so even a few thousand pounds more can make a real difference to the monthly payment.
Some lenders let a family member help without becoming an owner, through a guarantor mortgage, a joint borrower sole proprietor mortgage or a family deposit scheme where savings are held as security. These can keep your first-time buyer relief intact, because the helper does not own a share of the home.
A gifted deposit is also common. Lenders will ask for a letter confirming the money is a gift, not a loan, and your conveyancer will need to check where it came from.
Common mistakes to avoid
- Forgetting the cliff edge. Agreeing £505,000 instead of £500,000 adds £5,250 of Stamp Duty: £5,000 from losing relief and £250 more on the extra price.
- Assuming a partner qualifies. Check their history, including homes owned abroad or with a former partner, before you budget for relief.
- Spending the whole deposit. Keep cash back for Stamp Duty, fees, the survey and moving costs.
- Missing the Lifetime ISA timing. Your conveyancer must request the money in good time, and the account must have been open for at least 12 months.
- Overstating fittings. Furniture and fittings at a fair value can be excluded from the price, but inflating their value to dodge the cliff edge is evasion and HMRC checks it.
Example: when one buyer has owned before
Amira has never owned a home. Her partner Tom owned a flat with a former partner several years ago and sold his share. They are buying a £400,000 house together.
- If both were first-time buyers£5,000
- Because Tom has owned before: standard rates£10,000
If Amira bought alone, she would qualify and pay £5,000, though she would need to borrow on her income alone. Because Tom no longer owns a home, the 5% surcharge for additional properties does not apply. If he still owned his share, it probably would, and the bill would rise to £30,000.
If you are not yet sure that buying beats renting for you, the rent vs buy calculator compares the two year by year.