Stamp Duty First-Time Buyer Relief 2026: What Changed in April 2025

The temporary uplift to first-time buyer stamp duty relief ended on 31 March 2025. From April 2025, the threshold at which first-time buyers start paying SDLT dropped from £425,000 back to £300,000, and the maximum eligible purchase price fell from £625,000 to £500,000. If you are buying your first home in 2026, it is important to know the current rules -- and what they mean for your total purchase costs.

The current rules from April 2025

When the Autumn 2022 SDLT cuts were introduced, first-time buyers gained an enhanced relief: 0% on the first £425,000 of their purchase price (for properties up to £625,000). This was designed to help buyers in higher-cost areas, particularly London and the South East, where a £300,000 limit offered relatively little benefit given average prices.

That relief was always described as temporary, and it expired on 31 March 2025. From 1 April 2025, the first-time buyer SDLT relief reverted to its pre-2022 form:

• 0% on the first £300,000 of the purchase price.
• 5% on £300,001 to £500,000.
• No relief on purchases above £500,000 (standard rates apply).

This is the system that was in place from November 2017 (when first-time buyer relief was introduced) until September 2022. The reversion affects buyers in higher-price markets most acutely.

How much you pay in 2026: examples

Property at £280,000

A first-time buyer pays: 0% on £280,000 = £0. The property is below the £300,000 threshold, so no SDLT at all. Standard rate without relief would give: 0% on £250,000 = £0, plus 5% on £30,000 = £1,500. FTB relief saves £1,500.

Property at £350,000

A first-time buyer pays: 0% on £300,000 = £0, plus 5% on £50,000 = £2,500. Total: £2,500.

Standard rate without FTB relief: 0% on £250,000 = £0, plus 5% on £100,000 = £5,000. Total: £5,000.

FTB relief saves: £2,500.

Property at £450,000

A first-time buyer pays: 0% on £300,000 = £0, plus 5% on £150,000 = £7,500. Total: £7,500.

Standard rate without FTB relief: 0% on £250,000 = £0, plus 5% on £200,000 = £10,000. Total: £10,000.

FTB relief saves: £2,500.

Property at £520,000

No first-time buyer relief applies because the purchase price exceeds £500,000. Standard SDLT rates apply:

0% on £250,000 = £0, plus 5% on £270,000 = £13,500. Total: £13,500.

Who qualifies as a first-time buyer

HMRC's definition is stricter than many buyers expect:

You must never have owned a freehold or leasehold residential property, anywhere in the world. This means:

• Properties you owned in another country count.
• Properties inherited or received as a gift count -- even if you later sold them.
• Properties you previously owned that you have since sold or transferred count.
• Being named on a mortgage but not on the legal title does not count as ownership.
• Owning a share in a property (e.g. through co-ownership) counts.

The requirement is about ownership history, not current ownership status. This differs from some other first-time buyer schemes that look at current ownership.

Joint purchases: the all-or-nothing rule

When two or more people buy a property together, all buyers must meet the first-time buyer definition for relief to apply. If even one buyer has previously owned a property, the entire purchase loses first-time buyer relief and standard SDLT rates apply.

This is particularly relevant for:

• Couples where one partner has previously owned a property.
• Parents buying jointly with a child to help with affordability.
• Friends buying together where one has previously owned.

In some cases, it may be worth considering whether the first-time buyer alone can qualify for the mortgage and carry the purchase in their name only -- though this has implications for affordability, legal ownership and future stamp duty on any subsequent purchase.

Shared ownership and first-time buyer relief

Shared ownership schemes allow buyers to purchase a share (typically 25-75%) of a property and pay rent on the remaining share, with the option to 'staircase' (buy further shares) over time.

For SDLT purposes, a first-time buyer purchasing through shared ownership has two options:

Option 1: Market value election. Pay SDLT upfront based on the full market value of the property, using FTB relief thresholds. This can be more tax-efficient if you plan to staircase to 100% ownership, as future staircasing purchases up to 80% attract no further SDLT.

Option 2: Standard method. Pay SDLT only on the share you are actually purchasing (plus a separate calculation on the rental element). This reduces the upfront SDLT cost. However, when you staircase, each purchase over 80% triggers further SDLT.

First-time buyer relief applies under both options where the property's full market value is within the £500,000 limit.

How the relief interacts with the 3% surcharge

The 3% additional dwellings surcharge applies when you are purchasing an additional residential property while retaining your existing home. Since genuine first-time buyers have never owned, the surcharge question typically does not arise for them.

However, there is an edge case: if you are a first-time buyer who owns a share in an overseas property (even as a minority shareholder), that ownership disqualifies you from FTB relief and may also trigger questions about the 3% surcharge. HMRC's guidance on overseas property and the surcharge is complex -- seek specialist advice if this applies to you.

Scotland and Wales: different rules

First-time buyer relief for SDLT applies only in England and Northern Ireland. Scotland and Wales have their own property taxes:

• Scotland: Land and Buildings Transaction Tax (LBTT) has a first-time buyer relief of £2,000 (reducing LBTT due for qualifying purchases).
• Wales: Land Transaction Tax (LTT) has no equivalent first-time buyer relief as at 2026/27.

If you are buying in Scotland or Wales, check the specific rules for those nations before calculating your expected tax bill.

Planning ahead: building a deposit

Given the reversion of FTB thresholds in April 2025, buyers targeting properties in the £300,001-£500,000 range now face some SDLT liability that did not exist under the temporary relief. Factoring this into your deposit target is important.

For a £380,000 property, you now need: a minimum 5% deposit (£19,000) plus £4,000 SDLT (0% on £300k + 5% on £80k) plus legal fees (£1,500-£3,000) plus survey (£400-£800). Total upfront costs: approximately £25,000-£27,000, of which the SDLT component is now £4,000 instead of £0 under the expired relief.

The Lifetime ISA remains a useful deposit-building tool for first-time buyers targeting properties up to £450,000, with the government adding £1 for every £4 you save (up to £1,000 bonus per year). Combining LISA savings with an understanding of the current SDLT position allows you to plan your total purchase budget accurately.

Sources

• gov.uk: Stamp Duty Land Tax -- first-time buyers
• HMRC: SDLT guidance SDLTM29900
• gov.uk: Autumn 2022 Budget -- SDLT temporary relief
• Spring Budget 2024 -- confirmation of relief end date April 2025