Are First Time Buyers Exempt for paying Stamp Duty?

First Time Buyers are not exempt from paying Stamp Duty but there is some good news.

If you purchase a residential property below £300K you will not have to pay any Stamp Duty at all. However, if your property purchase is over £300K you will have to pay Stamp Duty on the amount over £300k. For example, if your property is £500K the following applies:

  • For the first £300k you will pay nothing at all.
  • From £300,001 to £500k you will pay 5%.
  • You are effectively therefore paying Stamp Duty on £200K at 5%.
  • Note that there are different rates if you property is in Scotland or Wales.

The above figures are based on the rules as of 1st October 2021 and may be subject to change. You can check the latest rates, by visiting gov.uk and also use the Stamp Duty Calculator find out what you will have the pay.

Check you really qualify as a First Time Buyer

To qualify as a First Time Buyer you must have never owned a property before. So if you purchased one a number of years ago and sold it, you will not be eligible.

There are some other requirements you should also check:

  • Have you ever owned property abroad?
  • Have you ever inherited property?
  • Are you looking to let the property and not live in it?

If you answer Yes to any of these questions you do not qualify.

Note that this applies to all applicants, so if you are applying for a joint mortgage, you both need to meet the criteria, not just one of you.

Mixed use property and Stamp Duty

A mixed-use property is one that shares both elements of a residential and non-residential property. The simplest example of a mixed use property is if you a purchasing a flat that is connected to a shop.

Property accepted as being mixed use qualifies for lower Stamp Duty Rates and you can check the latest rates on Gov.uk and what qualifies as mixed use.

Land and Buildings Transaction Tax

Land and Buildings Transaction Tax (LBTT) is a tax applied to purchases of land or property, both residential and non-residential, and to non-residential leases in Scotland.

For more details and the latest rates see the gov.scot site.

Land Transaction Tax

Land Transaction Tax LTT replaced Stamp Duty Land Tax (SDLT) in Wales from 1 April 2018. The Welsh Revenue Authority (WRA) collects and manages the tax for the Welsh Government.

For more details and the latest rates see the gov.wales site.