First-Time Buyer vs Standard Stamp Duty Rates
Side-by-side comparison showing exactly how much first-time buyers save at every price point from £250,000 to £500,000.
Key Points
- •FTBs pay 0% up to £300,000 vs 0% up to £125,000 for standard buyers
- •Maximum FTB saving is £2,500 on properties up to £500,000
- •FTB relief only available on properties up to £500,000
- •Both joint buyers must be FTBs to qualify for relief
In this article
How FTB Relief Compares to Standard Rates
First-time buyer relief fundamentally restructures stamp duty by providing a significantly higher nil-rate band. While standard buyers pay 0% on just the first £125,000, first-time buyers pay nothing on the first £300,000. This single change delivers consistent savings across the entire £250,000 to £500,000 price range.
The relief also simplifies the rate structure for qualifying purchases. Instead of navigating five progressive rate bands (0%, 2%, 5%, 10%, 12%), first-time buyers face just two bands: 0% up to £300,000 and 5% from £300,001 to £500,000. This creates a straightforward calculation where the maximum liability is capped at £10,000 for a £500,000 property.
Because stamp duty is a progressive tax—calculated in slices across different rate bands—the saving comes from paying 0% on a larger portion of the purchase price. On a £350,000 property, for example, standard buyers pay tax on £225,000 of value (£125,001–£350,000 across two rate bands), while first-time buyers only pay tax on £50,000 (£300,001–£350,000 in one band). This mechanism ensures the £2,500 saving remains constant across most of the eligible price range.
Rate Bands Side by Side
The table below shows the stark difference in rate structures between standard SDLT and first-time buyer relief. Note how FTB relief eliminates the 2% band entirely and triples the nil-rate threshold.
Standard SDLT Rates
| Band | Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001–£250,000 | 2% |
| £250,001–£925,000 | 5% |
| £925,001–£1,500,000 | 10% |
| Over £1,500,000 | 12% |
First-Time Buyer Rates
| Band | Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001–£500,000 | 5% |
| No relief above £500,000 | |
The simplified two-band structure for first-time buyers makes calculations straightforward and eliminates the complexity of the 2% band that standard buyers must navigate between £125,001 and £250,000.
Worked Examples at Key Price Points
The table below demonstrates the exact SDLT liability for both first-time buyers and standard buyers at six common price points. Notice how the £2,500 saving remains constant across the entire £250,000 to £500,000 range.
| Property Price | FTB SDLT | Standard SDLT | Saving |
|---|---|---|---|
| £250,000 | £0 | £2,500 | £2,500 |
| £300,000 | £0 | £2,500 | £2,500 |
| £350,000 | £2,500 | £5,000 | £2,500 |
| £400,000 | £5,000 | £7,500 | £2,500 |
| £450,000 | £7,500 | £10,000 | £2,500 |
| £500,000 | £10,000 | £12,500 | £2,500 |
Calculation Example (£350,000):
FTB: First £300,000 at 0% = £0, remaining £50,000 at 5% = £2,500. Total: £2,500
Standard: First £125,000 at 0% = £0, next £125,000 at 2% = £2,500, remaining £100,000 at 5% = £5,000. Total: £7,500
Saving: £5,000
The consistent £2,500 saving across this price range is no coincidence. It derives from the £175,000 difference in nil-rate thresholds (£300,000 – £125,000) combined with the 2% rate that standard buyers pay on the £125,001–£250,000 band. This creates £2,500 in additional tax (2% × £125,000) that first-time buyers completely avoid.
Who Qualifies as a First-Time Buyer?
HMRC defines first-time buyer relief eligibility through strict criteria that must all be satisfied simultaneously:
- Never owned property anywhere: You must not have owned a residential property anywhere in the world, either solely or jointly, at any point in your life.
- Property price cap: The purchase price must not exceed £500,000. Properties priced at £500,001 or above receive no FTB relief whatsoever.
- Residential property only: The property must be intended as your main residence. Buy-to-let purchases do not qualify regardless of price.
- Not replacing a main residence: You cannot claim FTB relief if you currently own or have previously owned another main residence.
Joint Purchase Warning
For joint purchases, all buyers must individually qualify as first-time buyers. If even one person has previously owned property anywhere in the world—whether a flat in London, a villa in Spain, or an inherited cottage in Scotland—the entire purchase loses FTB relief eligibility. Both buyers would then pay standard rates in full.
Properties Over £500,000
First-time buyer relief operates as an all-or-nothing benefit that terminates abruptly at the £500,000 threshold. Properties priced at £500,001 or above receive no FTB relief—buyers pay standard SDLT rates in full across all bands. This creates a significant "cliff edge" effect where a single pound over the limit can cost thousands in additional tax.
Cliff Edge Example: £510,000 Property
With FTB relief (if it applied): First £300,000 at 0% = £0, remaining £210,000 at 5% = £10,500. Total: £10,500
Actual cost (no relief above £500k): First £125,000 at 0% = £0, next £125,000 at 2% = £2,500, remaining £260,000 at 5% = £13,000. Total: £15,500
Additional tax: £5,000 (£15,500 – £10,500)
This cliff edge makes strategic pricing crucial for first-time buyers searching near the £500,000 mark. A property priced at £499,000 incurs £9,950 SDLT with FTB relief. The same property at £501,000 costs £15,550 at standard rates—an additional £5,600 despite just £2,000 more purchase price.
Some buyers negotiate price reductions to stay under the £500,000 threshold, while others structure transactions to separate fixtures or fittings from the property price. However, HMRC scrutinizes such arrangements closely to prevent artificial price manipulation purely to access FTB relief.
FTB Relief in Scotland and Wales
Scotland and Wales operate separate property tax systems with different approaches to first-time buyer relief. Neither mirrors the generous English/Northern Irish structure.
Scotland (LBTT)
Scotland's Land and Buildings Transaction Tax (LBTT) provides a more modest first-time buyer relief. The nil-rate threshold increases from £145,000 to £175,000—just £30,000 additional relief compared to England's £175,000 uplift. This delivers a maximum saving of £600 (£30,000 × 2% rate in the second band).
| Property Price | FTB LBTT | Standard LBTT | Saving |
|---|---|---|---|
| £175,000 | £0 | £600 | £600 |
| £250,000 | £3,100 | £3,700 | £600 |
| £300,000 | £5,850 | £6,450 | £600 |
Wales (LTT)
Wales offers no first-time buyer relief under its Land Transaction Tax (LTT) system. All buyers—regardless of previous ownership status—pay the same progressive rates starting at 0% up to £225,000, then 6% from £225,001 to £400,000.
This means a first-time buyer purchasing a £300,000 property in Cardiff pays £4,500 LTT, while the same buyer in Birmingham would pay £0 SDLT with FTB relief—a £4,500 difference driven purely by jurisdiction. This regional disparity significantly affects affordability calculations for first-time buyers comparing opportunities across UK nations.
Calculate Your Stamp Duty
Use our specialized first-time buyer calculator to see your exact SDLT liability and compare it with standard rates. Enter your property price and purchase details to get instant calculations with full breakdowns.
Calculate First-Time Buyer SDLTEmma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Stamp Duty Calculator to help buyers understand the complex world of property transaction taxes.