What’s the deal with first time buyers stamp duty?

March 02, 2022

If you’re thinking of taking the first step onto the property ladder, you’ve likely spent plenty of time analysing the financial implications; what you can afford, what you can borrow, what deposit you need. But do you know the rules surrounding stamp duty for first-time buyers?

First time buyers have a different set of rules when it comes to purchasing a first home, and thank goodness. Saving for your first home can be a real challenge, taking years of sacrifices and penny savings, work that is well worth it when you’re finally handed the keys to your first home.

You’ll need the deposit (at least 10% of the property value unless you’re using Help to Buy at 5%), solicitor fees for your purchase, an agreement in principle from the mortgage provider and proof of funds for the deposit. But the trickiest one to get your head around can often be the stamp duty.

Stamp Duty Land Tax is essentially the tax you pay for buying a property.

You may have seen the news during the pandemic that a stamp duty holiday was introduced, this benefited all buyers, with savings available of up to £15,000. Now that rules have returned to ‘normal’, only first time buyers benefit from any exception.

If you are a first-time buyer, you don’t need to pay stamp duty on a property, as long as the value is £300,000 or less.

If you are buying over the value of £300,000 as a first-time buyer, the rate returns to that which any other buyer would pay (except someone buying a second home, but that’s a whole other story).

If you need to establish what you would pay on a property over £300,000 as a first-time buyer, there is a useful calculator available on the Government website, available here.

If you’re starting out on the property ladder, you might like to attend our First Time Buyer event at Fleet Mill, you can find out more, here.

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