First-Time Buyer Stamp Duty: Complete Example
A fully eligible first-time buyer can save thousands on stamp duty. This guide walks through the exact rates, a step-by-step calculation at £350,000, and the eligibility rules you must satisfy to claim the relief.
Last verified: April 2026
Key Takeaways
- •FTB relief gives 0% on the first £300,000 and 5% on £300,001 to £500,000.
- •Above £500,000 there is NO relief. Standard rates apply from band 1.
- •Every buyer on a joint purchase must be a first-time buyer. One prior owner disqualifies all.
- •You must not own property anywhere in the world, at any time.
- •At £350,000 a FTB pays £2,500 versus £7,500 for a standard buyer, a saving of £5,000.
In this article
What is First-Time Buyer Relief?
First-time buyer relief is a statutory SDLT concession that reduces or eliminates the tax payable when a qualifying buyer purchases their first residential property. The relief was substantially enhanced in September 2022 and remains in force as of April 2026.
Under the relief, the nil-rate threshold is raised from the standard £125,000 to £300,000. This means the first £300,000 of a qualifying purchase is completely exempt from SDLT. On the portion between £300,001 and £500,000, a flat 5% rate applies. Above £500,000, the relief disappears entirely and standard rates apply from the first pound.
The relief was introduced to help those entering the property market for the first time, recognising that deposit saving is often the biggest hurdle. By removing or reducing stamp duty, buyers can redirect those funds toward their deposit, reducing their loan-to-value ratio and potentially unlocking better mortgage rates. For purchases up to £300,000, the saving is complete: no stamp duty at all. For purchases between £300,001 and £500,000, the saving is the difference between the standard rate calculation and the FTB calculation, which at £350,000 amounts to a meaningful £5,000.
Statutory basis: The relief is provided by Finance Act 2003, s57AA, as amended. It applies to transactions with an effective date on or after 23 September 2022.
Eligibility Criteria
To claim first-time buyer relief, all of the following conditions must be met:
- Every buyer on the transaction must be a first-time buyer. This is not a per-person test on a joint purchase.
- No buyer must have previously owned a residential property anywhere in the world, whether in the UK or overseas.
- The property being purchased must be residential (not mixed-use or commercial).
- The purchase price must not exceed £500,000. Above this figure, no relief applies at all.
- The purchase must be of the major interest in land (freehold or leasehold with at least 21 years remaining).
The residency requirement for the property is straightforward: it must be used or intended for use as a dwelling. Mixed-use properties, those with commercial elements on the ground floor, and properties in certain unusual tenures may not qualify. If there is any doubt about whether a property qualifies as residential for SDLT purposes, a conveyancer should confirm before exchange.
Joint purchases: Both (or all) buyers must satisfy the eligibility conditions. If one buyer has ever owned property, even decades ago, even overseas, the entire purchase loses the relief.
Rate Comparison
The table below shows SDLT payable under standard rates versus FTB relief at common purchase prices. The saving is the difference between the two columns.
| Purchase Price | FTB Pays | Standard Pays | Saving |
|---|---|---|---|
| £250,000 | £0 | £2,500 | £2,500 |
| £300,000 | £0 | £5,000 | £5,000 |
| £350,000 | £2,500 | £7,500 | £5,000 |
| £400,000 | £5,000 | £10,000 | £5,000 |
| £500,000 | £10,000 | £15,000 | £5,000 |
Above £500,000: FTB relief disappears entirely. A first-time buyer purchasing at £510,000 pays the same SDLT as any other buyer. Standard rates are applied from the first pound, with no partial relief for the £500,000 portion.
Worked Example at £350,000
Alex and Jamie are both first-time buyers purchasing a flat in Birmingham for £350,000. Neither has ever owned property. Here is exactly how their SDLT is calculated.
First-Time Buyer Calculation
| Band | Rate | Taxable Amount | Tax |
|---|---|---|---|
| £0 to £300,000 | 0% | £300,000 | £0 |
| £300,001 to £350,000 | 5% | £50,000 | £2,500 |
| Total FTB SDLT | £2,500 | ||
Standard Rate Calculation (for comparison)
| Band | Rate | Taxable Amount | Tax |
|---|---|---|---|
| £0 to £125,000 | 0% | £125,000 | £0 |
| £125,001 to £250,000 | 2% | £125,000 | £2,500 |
| £250,001 to £350,000 | 5% | £100,000 | £5,000 |
| Total Standard SDLT | £7,500 | ||
FTB Pays
£2,500
Standard Pays
£7,500
FTB Saving
£5,000
Disqualifying Factors
The following situations will disqualify a buyer from FTB relief. If any apply, standard rates apply in full.
Spouse or civil partner previously owned
If your spouse or civil partner has previously owned a property (even before you met), you lose FTB status as a couple from the date of marriage or civil partnership.
Inherited property
Inheriting a property, even a share of one, counts as ownership. If you received a beneficial interest in a property through an estate, you are not a first-time buyer.
Property held in trust
If you are a beneficiary of a trust that owns residential property, you are treated as owning that property for FTB purposes.
Overseas prior ownership
A property in Spain, Australia, or anywhere else in the world counts. There is no geographic exclusion for overseas property.
Purchase price above £500,000
If the purchase price is a single penny above £500,000, the relief is completely unavailable. Not reduced, but eliminated entirely.
Timing note: FTB status is assessed at the effective date of the transaction, usually completion day. If your circumstances change between exchange and completion (for example, you marry someone who previously owned property), your eligibility must be re-assessed at completion.
Common Mistakes to Watch Out For
First-time buyer relief is often misunderstood, and mistakes can be costly. These are the errors that come up repeatedly when buyers try to claim relief they are not entitled to, or fail to claim relief they are.
Assuming the relief is claimed automatically
Your conveyancer must indicate FTB status on the SDLT return. If your conveyancer incorrectly files a standard return and you pay too much, you have 12 months from the filing date to amend the return and claim a refund. Always check your SDLT1 before it is submitted.
Forgetting an inherited share
Many buyers receive a small share of a parent's estate without realising it counts as property ownership for SDLT purposes. Even a 1% beneficial interest, received years ago, disqualifies you from FTB relief. If there is any question, check with a solicitor before proceeding on FTB rates.
Pricing the property at exactly £500,000
At exactly £500,000, the maximum FTB saving applies (the difference between FTB and standard rates at that level). However, purchasing at £500,001 eliminates the relief entirely. Buyers and vendors sometimes negotiate around this threshold. If you are close to £500,000, run both calculations before finalising your offer price.
Thinking a Help to Buy equity loan changes the rules
Using a Help to Buy equity loan does not affect SDLT eligibility or the rates that apply. The SDLT is calculated on the full purchase price, not just the amount you are personally funding. The equity loan element is not deducted before calculating SDLT.
Forum Spotlight: Real Buyer Questions
These questions are based on real discussions from UK property forums including Reddit r/HousingUK and MoneySavingExpert. They reflect genuine confusion that buyers encounter when trying to understand whether they qualify for first-time buyer relief.
Someone asked on a UK property forum:
"I inherited a 10% share of my aunt's house three years ago. The estate was wound up and I received some cash. I never lived there. Does this mean I'm not a first-time buyer?"
Unfortunately, yes. Any beneficial interest in a residential property counts as ownership for SDLT purposes, regardless of how small the share was or how it was acquired. The fact that you never lived in the property and that the interest has since been disposed of does not undo the historical ownership. You are not a first-time buyer and cannot claim FTB relief on your purchase. Your conveyancer will need to file the SDLT return using standard rates.
Someone asked on a UK property forum:
"My partner and I are buying together at £490,000. I have never owned. My partner sold a flat abroad five years ago. Are we entitled to any FTB relief at all?"
No, not on a joint purchase. Because your partner has previously owned residential property (even overseas), the all-or-nothing rule applies and neither of you can claim FTB relief on this joint transaction. The full standard rate applies: you will pay £15,000 on a £500,000 equivalent rather than the £10,000 a joint purchase of two genuine first-time buyers would attract. If you can obtain a mortgage solely in your own name, you could potentially buy as an individual FTB and claim the relief, though this would require separate legal and financial advice.
Someone asked on a UK property forum:
"We are buying a flat for £305,000. Our solicitor filed the SDLT return without claiming FTB relief and we paid £5,250. We should have paid £250 as first-time buyers. Can we get the money back?"
Yes, absolutely. This is exactly the situation where an SDLT amendment claim applies. You have 12 months from the date the SDLT return was filed to amend it and claim a refund. Contact your conveyancer immediately and ask them to submit an amended SDLT return. If they are unresponsive or unwilling to help, you can submit an amendment directly through HMRC. Make sure you have your SDLT transaction reference number (found on your SDLT5 certificate) to hand. The overpaid tax should be refunded directly to you once HMRC processes the amendment.
Someone asked on a UK property forum:
"My mum put my name on her mortgage years ago to help her get approved, but I had no ownership stake. Am I still a first-time buyer?"
Being named on a mortgage does not automatically mean you owned the property. What matters for FTB purposes is whether you held a legal or beneficial interest in the property. If you were a mortgage guarantor only, with no legal title and no beneficial interest in the property, you should still qualify as a first-time buyer. However, the position can be complicated depending on exactly how the arrangement was structured. You should ask a solicitor to review the original mortgage documentation before you file your SDLT return on FTB rates.
Frequently Asked Questions
My partner owned a property abroad. Do I get FTB relief?
No. Any joint buyer with prior ownership disqualifies the whole purchase. FTB relief requires every buyer on the transaction to be a genuine first-time buyer, regardless of where the previously-owned property was located.
Does FTB relief apply if the property costs £510,000?
No. Above £500,000, standard rates apply from band 1 with no relief whatsoever. There is no partial relief for the first £500,000 portion when the total price exceeds the ceiling.
We rented before. Does that affect FTB status?
No. Renting does not affect eligibility for first-time buyer relief. Only prior property ownership counts. You can have rented for decades and still qualify, provided you have never held a legal or beneficial interest in any residential property.
When is FTB status determined?
FTB status is assessed at the effective date of the transaction, which is usually the date of completion rather than exchange of contracts. If your circumstances change between exchange and completion, the position at completion governs.
Reviewed by
Emma 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 Calculate My Stamp Duty UK to help buyers understand the complex world of property transaction taxes.