Stamp Duty For First Time Buyers

How Much Stamp Duty Do First Time Buyers Pay?.

How Much Stamp Duty Do First Time Buyers Pay?

Since November 2017, first time buyers in England And Wales paying less than £300,000 for their new homes, have not had to pay any stamp duty on their purchase. During the stamp duty holiday brought in to support the property market through the coronavirus pandemic, stamp duty was cut for everyone in England and Northern Ireland, including first time buyers. This means that tax is not payable on any property up to £500,000 until 30th June, 2021.

From 1st July, 2021 to 30th September, 2021, there are no stamp duty costs in the UK (England And Northern Ireland) payable on properties up to £250,000 (unless you own an additional property).

If you are buying a property in Scotland, you’ll pay no LBTT as a first-time buyer if the property is worth less than £175,000. No-one in Wales pays LTT on property costing less than £180,000.

See details on stamp duty rates in Scotland and Wales here.

To calculate exactly how much stamp duty costs in the UK are, use our free online stamp duty calculator

Under normal circumstances, ie: when the stamp duty holiday is over, certain exemptions apply to new homeowners, however first-time buyers are not completely exempt from paying stamp duty, rather, the amount you pay depends on the price of the property. Until stamp duty costs in the UK were changed in July 2020, first-time buyers paid no stamp duty on the first £300,000 of a property’s purchase price. Between July, and March 31, 2021, first-time buyers were exempt from stamp duty on the first £500,000 of a property’s purchase price. Under the current stamp duty rates, which are in place until June 31, 2021, you can make substantial savings as a first-time buyer if the property you’re buying costs more than £300,000.

Stamp Duty Rates for First Time Buyers.

From 1 July 2021,first-time buyers in England or Northern Ireland will pay no Stamp Duty on properties costing up to £300,000. For properties costing up to £500,000, you will pay no Stamp Duty on the first £300,000 but pay Stamp Duty at the relevant rate of 5% on the remaining amount, up to £200,000. If the property you’re buying is worth over £500,000, you will pay the standard rates of Stamp Duty and won’t qualify for first-time buyer’s relief.

The current stamp duty rates (under SDLT holiday rates) are:

Minimum Purchase Price

Maximum Purchase Price

Stamp Duty Rate*

£0

£500,000

£500,001

£925,000

£925,001

£1.5 MILLION

13%

Over £1.5 million

15%

*only applies only to the part of the property price falling within each band

First Time Buyers In Scotland.

Scottish Stamp Duty Rates: If you are buying your first home in Scotland, you’ll pay no LBTT if it costs less than £175,000. If your home is worth more than that you’ll pay LBTT at the normal rate. Here are the scottish stamp duty rates for first time buyers.

The current stamp duty rates (under SDLT holiday rates) are:

Purchase Price

LBTT For First Time Buyers

£0 – £175,000

£175,001 – £250,000

£250,001 – £325,000

£325,001 – £750,000

10%

£750,00 and above

12%

First Time Buyers In Wales.

In Wales there is no first-time buyer relief. You’ll pay the same LTT bill regardless of whether this is your first home or not. However, no-one in Wales pays LTT on properties worth less than £180,000. LTT is also tiered based on the value of your home, so here’s what you’ll pay:

The current stamp duty rates (under SDLT holiday rates) are:

Purchase Price

LLT Rate For First Time Buyers

Up to £180,000

£250,001-£400,000

£400,001-£750,000

7.5%

£750,001-£1,500,000

10%

£1,500,000 Upwards

12%

Am I A First Time Buyer?

A first time buyer is a person who has never owned a home or had a mortgage in their name at any point previously. However, whether or not you qualify as a first time buyer is a bit more complicated than that. Different lenders have different guidelines as to who qualifies whilst the Government has its own rules as to who receives the stamp duty exemptions associated with being first time buyers. If you think you fit into this grey area and aren’t sure whether you are classed as a first time buyer or not, we will explain who exactly qualifies. Then you can take a look through the information we have compiled to help you make your first property purchase.

Who Qualifies For First Time Buyer Status?

Being a first time buyer is a very desirable status to have in the property world. This is because first-time buyers have no chain and their position is usually less complicated than those who do. It can take away a lot of the stress of buying/selling property. Here are the ways in which you can qualify for first time buyer status:

If you are a single person who has never owned a home before (this includes in any other country), you will be regarded as a first-time buyer. The same applies if you are a couple wanting to buy a house and NEITHER of you have ever previously bought a home.
If you have owned a commercial property before but not a dwelling you qualify as being a first time buyer. This is confusing as technically you own/have owned a property in theory. However, the rules about first time buyers surround property that are used as homes. So if you own a commercial property such as a shop/salon/office etc, you are still a first time buyer.

Be aware though, if the commercial property you own, or have owned, has living quarters attached/included in the building, you are NOT a first time buyer.

Who Is Not A First Time Buyer?

If you own or have owned property (a dwelling/home) that you inherited, you are not a first time buyer. The rules involve who has owned property, not bought property.
The same applies if you own a home that has been given to you as a gift. Some people are given houses by kind relatives; these people are no longer first time buyers.
If you are part of a couple who want to buy a house and one of you falls into either of the two categories above, you will not qualify as first time buyers on your purchase.
If you have never owned a home and plan to buy one as a landlord (ie: buy-to-let) then you are unable to take advantage of the Government’s stamp duty exemption rules.