Skip to main content Accessibility Statement
The big news from last week’s Budget was a reduction in Stamp Duty for first-time buyers in England, Wales and Northern Ireland. So here, we attempt to answer your questions about first-time buyers and Stamp Duty.

Stamp Duty for first-time buyers – your questions answered

The big news from last week’s Budget was a reduction in Stamp Duty for first-time buyers in England, Wales and Northern Ireland. Understandably, there have been a lot of questions and many of you have been calling the Money Advice Service to find out what this means for you.

So here, we attempt to answer your questions about first-time buyers and Stamp Duty.

What are the changes to Stamp Duty?

First-time buyers will no longer pay Stamp Duty on properties worth up to £300,000.

If the property is worth between £300,000 and £500,000, you will pay no Stamp Duty on the first £300,000, but will pay the standard 5% on the remaining amount.

For example, if the property is worth £450,000, you will pay no Stamp Duty on the first £300,000 and 5% on the remaining £150,000.

Under the old system, first-time buyers would pay £12,500 in Stamp Duty on this £450,000 property. The new system means they will pay just £7,500. 

What is a first-time buyer?

To be classified as a first-time buyer you must never have owned a residential property in the UK or abroad. This includes freeholds and interests in leaseholds.

You must also be purchasing your only or main residence. This means first-time buyers cannot get Stamp Duty relief on buy-to-let properties.

I’m buying my house after 22 November, will I have to pay Stamp Duty?

Stamp Duty is applied after completion of a sale. So, if you qualify as a first-time buyer, the property is under £500,00 and the deal was finished on or after 22 November, you will benefit from these changes to Stamp Duty.

This includes reserves on new build properties, where you have agreed to buy the property, but the deal has yet to be completed.

I bought my house before 22 November, can I get my Stamp Duty back?

Probably not. If the deal was completed before 22 November, you will have to pay normal rates of Stamp Duty.

However, sometimes people transfer the money for Stamp Duty to their solicitor’s holding account so it can be transferred on completion. In this case, you should be able to get back what you overpaid.

I inherited a house, am I a first-time-buyer?

No. Being a first-time buyer is about ownership, not buying. As you own the house you inherited, you are no longer a first-time buyer.

I was named on the deeds to my parents’ house, am I a first-time-buyer?

Like inheriting a house, being named on the deeds makes you an owner, so you are no longer a first-time buyer.

I’m buying a house with my partner. One of us is a first-time buyer, the other is not. Can we still get Stamp Duty relief?

If you’re married and jointly buying a property, then you both need to be first-time buyers to get Stamp Duty relief.

Unmarried people can still get a reduction in Stamp Duty, if the only person named on the mortgage deed is a first-time buyer.

But, there are a couple of things you need to be aware of:

First, the maximum saving on a property purchase is still £5,000 regardless of the number of names on the mortgage deed.

If the mortgage application is only in one name, it will be based on that person’s income alone, which might impact how much your lender is prepared to lend you.

Second, you need to think about what would happen if you split up. If the property is in both names, you will both have a claim. If the property is only in one name, then it’s possible you or your partner could be left with nothing legally. 

Can I get Stamp Duty relief if I’m purchasing a buy-to-let property?

No. To be a first-time buyer you must be purchasing a property you intend to live in. However, you can still sub-let a spare room and get Stamp Duty relief as long as you intend on living in the property.  

What do you think?

We really want you to share your views, but please remember to be nice ☺
All fields are required. Check out our full commenting guidelines

By clicking on 'Post Comment', you're agreeing to our Commenting Policy