Buying your first home is one of the biggest financial decisions you will make. Understanding how Stamp Duty Land Tax (SDLT) applies to first-time buyers could save you thousands. This guide explains the first-time buyer relief, who qualifies, the 3% surcharge trap, and exactly how much you will pay in 2026/27.
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Calculate Stamp Duty →First-Time Buyer Relief (Up to £300,000)
First-time buyers in England and Northern Ireland pay no stamp duty on properties up to £300,000. This is the first-time buyer relief introduced in November 2017.
For properties between £300,001 and £500,000, you pay 5% on the amount above £300,000. Properties above £500,000 do not qualify for first-time buyer relief — standard SDLT rates apply.
For a £400,000 property: a first-time buyer pays 5% on £100,000 = £5,000. A non-first-time buyer pays 0% on £125k + 2% on £125k + 5% on £150k = £10,000. You save £5,000.
Who Qualifies as a First-Time Buyer?
To claim first-time buyer SDLT relief, all of the following must apply:
- You have never owned or had an interest in a residential property anywhere in the world
- The property is your main residence (not a buy-to-let)
- Everyone you are buying with is also a first-time buyer
- The purchase is at market value (not a gift or transfer)
- The property value does not exceed £500,000
Common disqualifications:
- Inheriting any property, even a small share
- Being added to a parent's property deed as a child
- Owning a property abroad
- Buying through a trust where you are a beneficiary
- Previously owning and selling a property
Note: Owning a commercial property does not disqualify you. You can own a shop or office and still claim first-time buyer relief on your first residential purchase.
SDLT Rates for First-Time Buyers (2026/27)
| Property Price Band | First-Time Buyer Rate | Standard Rate |
|---|---|---|
| Up to £125,000 | 0% | 0% |
| £125,001 - £250,000 | 0% | 2% |
| £250,001 - £300,000 | 0% | 5% |
| £300,001 - £500,000 | 5% (on excess over £300k) | 5% |
| £500,001 - £625,000 | N/A (standard rates) | 5% |
| £625,001 - £925,000 | N/A (standard rates) | 10% |
| £925,001 - £1.5m | N/A (standard rates) | 12% |
| Above £1.5m | N/A (standard rates) | 15% |
3% Surcharge on Buy-to-Let
If you are a first-time buyer purchasing a property that is not your main residence (for example, a buy-to-let investment or a second home), the first-time buyer relief does not apply. Instead, you pay the standard SDLT rates plus the 3% additional property surcharge on the entire purchase price.
Tom buys a £200,000 property as a buy-to-let. He is a first-time buyer but cannot claim relief because it is not his main residence. He pays: £0 standard SDLT on £200k + 3% surcharge on £200k = £6,000 total. If he bought it as his main residence, he would pay £0.
This is a common trap for first-time investors. The 3% surcharge applies to the entire purchase price, not just the amount above a threshold.
Shared Ownership and SDLT
With shared ownership, you buy a percentage of the property (typically 25-75%) and pay rent on the rest. For SDLT purposes, you have two options:
Option 1: Pay SDLT on Your Share Only
You pay SDLT on the share you are purchasing. First-time buyer relief applies to your share. Each time you staircase (buy more shares), you may need to pay additional SDLT.
Option 2: Pay SDLT on the Full Market Value
You pay SDLT on the full market value upfront. First-time buyer relief applies as normal. You will not need to pay SDLT when staircasing later. This can be more cost-effective if you plan to staircase significantly.
A shared ownership property is worth £350,000. You buy a 50% share (£175,000). Option 1: Pay SDLT on £175,000 = £0 (below £300k threshold, relief applies). Option 2: Pay SDLT on £350,000 = £2,500 (5% on £50k above £300k). If you later staircase to 100%, you may pay additional SDLT under Option 1.
How to Calculate Your SDLT
| Property Price | First-Time Buyer SDLT | Standard SDLT | Your Saving |
|---|---|---|---|
| £150,000 | £0 | £0 | £0 |
| £200,000 | £0 | £1,500 | £1,500 |
| £250,000 | £0 | £2,500 | £2,500 |
| £300,000 | £0 | £5,000 | £5,000 |
| £350,000 | £2,500 | £7,500 | £5,000 |
| £400,000 | £5,000 | £10,000 | £5,000 |
| £450,000 | £7,500 | £12,500 | £5,000 |
| £500,000 | £10,000 | £15,000 | £5,000 |
Above £500,000, first-time buyer relief does not apply and both pay standard rates.
5 Tips to Reduce Your Stamp Duty
- Stay below £300,000 if possible — you pay zero SDLT as a first-time buyer
- Negotiate the price — a £1 reduction from £300,001 to £300,000 saves you £5,000
- Consider new build incentives — some developers offer to pay your stamp duty as an incentive
- Check for Stamp Duty holidays or regional schemes — though none are currently active, always check gov.uk for updates
- Get your completion date right — SDLT is based on rates at completion, not exchange
🏛️ See Your Exact Stamp Duty
Our Stamp Duty Calculator works out your precise SDLT as a first-time buyer, including the 3% surcharge if applicable.
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