Changes to Stamp Duty and What it Means for First Time Buyers

Every buyer of property or land in either England or Northern Ireland must pay the Stamp Duty Land Tax (SDLT) over a certain price threshold. However, if the land or property is in Scotland, buyers will pay the land and buildings tax and in Wales, the buyer will pay the land transaction tax.

The tax applies when you:

· Buy a freehold property

· Buy a new or existing leasehold

· Buy a property through the shared ownership scheme

· Are transferred land or property in exchange for a payment, e.g., taking on a mortgage or buying a share in a house.

What are the thresholds?

From the 1st July 2021 the stamp duty rates for residential property and land purchases:

· Below £250,000 – 0%

· £250,001 - £925,000 – 5%

· £925,001 - £1,500,000 – 10%

· £1,500,000+ - 12%

From 1st October 2021 the rates for residential and land purchases are due to return to normal:

· £0 – £125,000 – 0%

· £125,001 - £150,000 – 2%

· £150,001 - £925,000 – 5%

· £925,001 - £1,500,000 – 10%

· £1,500,000+ - 12%


To calculate the amount of stamp duty you are likely to pay, visit here.

First-time buyers

First-time buyers purchasing residential properties under £300,000 will not pay any stamp duty. If the property or land price is between £300,000 and £500,000, first-time buyers are eligible for a discount. This translates to first-time buyers paying 5% on the purchase price over £300,000 instead of on the whole value of the whole property.

In addition to this, high-street lenders are now offering mortgages requiring only a 5% deposit. This is due to a government scheme offering a partial guarantee (generally of up to 15%) to compensate lenders if borrowers default on payments.


Depending on your use of the property – whether it's for residential, non-residential or combined use; your residency status; and if this is your first property, you will have to pay different rates. The rates that you pay can be calculated here.

When to pay?

After the completion of the purchase, a Stamp Duty Land Tax (SDLT) return should be sent to HMRC, and the tax paid within 14 days. Usually, if you have a solicitor agent or conveyancer, they will file the return and pay the tax on your behalf on the day of completion and add the amount paid to their fees. They will also claim the stamp duty relief and or discounts on your behalf if you are a first-time buyer. Penalties and interest may accrue if you do not file and make a payment within 14 days.

When does stamp duty not apply?

Below are the instances where stamp duty does not apply:

· No money or other payment changes hands for a land or property transfer

· Property is left to you in a will.

· Property is transferred because of divorce or dissolution of a civil partnership

· You buy a freehold property for less than £40,000.

· You buy a new or assigned lease of 7 years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000.

· You buy a new or assigned lease of fewer than 7 years, as long as the amount you pay is less than the residential threshold or non-residential threshold of SDLT.

· You use alternative property financial arrangements, for example, to comply with Sharia law.


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