First Time Buyer Stamp Duty Calculator

When buying your first home you must sort through a huge amount of information about deposits, mortgage offers and all the extra costs associated with taking a loan from a bank or building society. Luckily, mortgage brokers like John Charcol are here to help.

We’ll guide you in the right direction and make sure you know what to expect as a first time buyer. In fact, one main benefit we want you to bear in mind is: being a first time buyer can save you money.

Alongside the specific mortgage products and lower rates on the market that are designed to help first time buyers get onto the property ladder, there’s also the first time buyer Stamp Duty exemption. We’ll go into all the details of what Stamp Duty is, how it's calculated and who’s eligible for the exemption.

Stamp Duty – officially known as Stamp Duty Land Tax (SDLT) – is a tax payable if you purchase property or land in England or Northern Ireland – currently £250,000. It is a tiered tax, meaning the total amount you pay depends on the price of the property and whether it is your primary residence, a second home, or a rental property. In Scotland, Stamp Duty is known as Land and Buildings Transaction Tax. In Wales, it's known as Land Transaction Tax. 

How Stamp Duty Works in England and Northern Ireland:

1. Price thresholds - Stamp Duty is only payable on property purchases above a certain value. The standard threshold for home movers (not first time buyers) is currently £250,000. Below this threshold, no tax is due

2. Residential properties - the rates are progressive, increasing in bands as the price of the property increases

3. Higher rates - additional properties, such as second homes or buy-to-let properties, come with a Stamp Duty surcharge of 3% on top of the standard rates

4. First time buyers - special reliefs may apply to first time buyers, which can reduce the amount of Stamp Duty owed or exempt them altogether, depending on the purchase price 

Learn more in our Stamp Duty video.

If you’re a first time buyer, you won't have to pay SDLT for properties valued at up to £425,000. If your property is worth between £425,000 and £625,000, you’ll pay no SDLT on the first £425,000 and only pay 5% on the portion between £425,000 and £625,000. If the property is worth more than £625,000, you won’t qualify for the exemption regardless of whether you’re a first time buyer and will have to be Stamp Duty at the standard rates.

Here are the current rates of Stamp Duty for first time buyers:

• You’re a first time buyer purchasing a property for £500,000
• You pay no Stamp Duty on the first £425,000
• You pay 5% Stamp Duty on £75,000
• 5% of £75,000 = £3,750
• You pay £3,750 in Stamp Duty

The standard rates for Stamp Duty – for non-first-time buyers – are as follows:

If you want to make Stamp Duty calculations simple, use our first time buyer Stamp Duty calculator above or take a look at our SDLT calculator

if you’re buying a property worth over £500,000. You can use these calculators to work out how much Stamp Duty you’ll have to pay. 

If you want to know more about how it works, see the examples below:

Example 1 

• You’re a first time buyer purchasing a property for £200,000 
• How much Stamp Duty do you pay? 
• The answer is nothing. That’s right, any property under £425,000 is subject to 0% SDLT for first time buyers 

Example 2 

• You’re a first time buyer purchasing a property for £450,000 
• How much Stamp Duty do you pay here? 
• As a first time buyer, you'll pay no SDLT on the first £425,000 
• You'll pay Stamp Duty at the standard rate of 5% on the remaining £25,000 
• You’ll pay £1,250 in Stamp Duty 

Example 3 

• You’re buying your first home for £950,000 
• You won’t qualify for the first time buyer Stamp Duty exemption as this is worth more than £625,000 
• Therefore you’ll pay according to the standard rates: 
• 0% on the first £250,000 = £0 
• 5% on £675,000 = £33,750 
• 10% on £25,000 = £2,500 
• Total = £36,250 

There could be serious consequences if you lie about being a first time buyer. Making a false declaration to HMRC is considered tax evasion, which could mean it's possible you’ll lose your home and maybe other assets. You may also acquire a criminal record.

HMRC has access to Land Registry and the SLDT databases. HMRC can also demand to see and assess bank statements and your credit reports. If they decide to proceed with an investigation, it’s fair to assume that they'll discover if you’ve previously owned property before, whether in part or in full.

HMRC has information-sharing arrangements abroad too, so it's unlikely that you'll be able to hide previous or present property ownership in other countries either.

Inheriting property also matters when you want to qualify as a first time buyer. If you inherited land or property from a relative, you won't be able to declare that you're a first time buyer. This is also the case if you were gifted property or if someone else purchased a property and added you to the title deeds. One main exception which would still allow you to qualify as a first time buyer is if you inherited property that was not residential or was mixed-use without any type of dwelling.

Many buyers make the common mistake of thinking that because they haven't actually purchased a property, they could still qualify as a first time buyer. To be a first time buyer, you must not have owned residential property before  - i.e. you must not have been on the title deeds as an owner – regardless of whether you bought it yourself or not.

For any tax advice about inheritance, speak to a tax adviser about the different options.