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Residential property specialist First Time Buyer Stamp Duty
In terms of residential property, much of the press attention following Chancellor Rachel Reeves’ first Budget focused on the increase in Stamp Duty for second homeowners and property investors. Conversely, imminent changes affecting buyers of main homes (i.e. the vast majority of buyers) have all but passed under the radar. The previous government announced those changes earlier this year, and the new Chancellor has opted not to delay them.
This means that most buyers of main residences – including many first time buyers – face increased Stamp Duty UNLESS they complete on or before 31 March 2025.
That’s because, for non-first-time buyers completing after 31 March 2025, the Stamp Duty threshold reduces from £250,000 to £125,000. For first time buyers, the threshold before Stamp Duty is payable drops from £425,000 to £300,000.
In addition, if a first time purchase exceeds £500,000 (instead of the current £625,000), buyers will not benefit from any relief. In other words, they will pay Stamp Duty at the standard rate on the property’s value over £125,000.
Stamp Duty Examples
So, for example, a first time buyer currently pays no Stamp Duty on a purchase of £425,000. From 1 April 2025, they pay nothing on the first £300,000 but 5% on the balance of £125,000. Total Stamp Duty = £6,250. That’s a significant outlay at an otherwise expensive time and an additional barrier to purchasing for many.
A non-first time buyer purchasing a main residence for £600,000 currently pays no Stamp Duty on the first £250,000 and 5% on the balance of £350,000. Total Stamp Duty = £17,500. From 1 April 2025, they will pay no Stamp Duty on the first £125,000, 2% on the tranche between £125,001 and £250,000, and 5% on the balance of £350,000. Total Stamp Duty = £20,000: an increase of £2,500.
First time buyer Stamp Duty amounts
In the table below are examples of current Stamp Duty amounts payable by first time buyers of freehold property compared with the amounts payable from 1 April 2025.
| Purchase Price | To 31 March 2025 | From 1 April 2025 |
| £250,000 | £0 | £0 |
| £300,000 | £0 | £0 |
| £350,000 | £0 | £2,500 |
| £400,000 | £0 | £5,000 |
| £450,000 | £1,250 | £7,500 |
| £500,000 | £3,750 | £10,000 |
| £550,000 | £6,250 | £17,500 |
| £650,000 | £20,000 | £22,500 |
Calculate your Stamp Duty using the government’s Stamp Duty Calculator.
A need for speed
To beat the increase, you must complete your purchase no later than 31 March 2025. And remember, buying a house takes time. Common hurdles to overcome include:
- a delayed mortgage offer;
- delayed searches or problems revealed by searches;
- a delay elsewhere in the conveyancing chain; and
- issues with the property revealed in the survey.
See also: How long does conveyancing take?
Realistically, to be relatively confident of completing on or before 31 March 2025, you should begin the conveyancing process pretty soon. Unfortunately, we are now entering a time of year when, typically, fewer properties come to market.
