Do I qualify for first-time buyer relief if I've inherited a property?

No. If you've ever owned a residential property—including through inheritance—you no longer qualify as a first-time buyer for stamp duty purposes, even if you sold or gave away that property. HMRC's definition is strict and applies to any interest in residential property anywhere in the world.

Can I use the first home scheme and claim stamp duty relief?

Yes, provided the property you're buying under the first home scheme costs £625,000 or less and you meet the first-time buyer criteria. The first home scheme offers discounted properties to eligible buyers, and stamp duty relief can apply on top of that discount, reducing your upfront costs further.

What if the property I want costs £626,000—can I negotiate to qualify?

If you can negotiate the purchase price down to £625,000 or below, you will qualify for first-time buyer relief and save significantly on stamp duty. A £1,000 reduction in price can cut your stamp duty bill by over £11,000, making negotiation highly worthwhile near the threshold.

How much is stamp duty if I'm buying with someone who already owns a property?

You will not qualify for first-time buyer relief if any co-buyer has previously owned property. Instead, you'll pay standard SDLT rates, and if your co-buyer still owns another property at the time of purchase, you may also pay the 3% higher rate surcharge on top.

When do I pay stamp duty—at exchange or completion?

Stamp duty is due within 14 days of completion, not exchange. Your solicitor will usually collect the funds from you ahead of completion and pay HMRC on your behalf as part of the settlement process.

How do I know the current stamp duty thresholds are still correct?

SDLT thresholds can change in government budgets. Always check the latest rates on gov.uk or consult your solicitor before exchanging contracts. HMRC publishes updates whenever rates are revised, and our stamp duty calculator is updated in line with official changes.

Guides

Stamp Duty for First-Time Buyers in London

By Seymont London · 26 May 2026

A London interior photographed for Seymont London

First-time buyers in London pay no stamp duty on properties up to £425,000, and 5% on the portion between £425,001 and £625,000, provided the purchase price doesn't exceed £625,000. This first time buyer relief, formally known as First-Time Buyers' Relief, can save you up to £11,250 compared to standard rates—a significant advantage in a city where the average property price often stretches budgets to their limit. Understanding stamp duty for first time buyers is essential when calculating how much you need to complete your purchase. Stamp Duty Land Tax (SDLT) is paid to HMRC when you buy a property or land over a certain threshold in England and Northern Ireland. For many Londoners taking their first step onto the property ladder, this relief makes the difference between affording a home and being priced out entirely. In this guide, we walk you through exactly how the relief works, whether you qualify, how to calculate what you'll pay, and the practical steps to claim it when you exchange contracts on your new home in London.

Understanding First-Time Buyer Relief and How It Works

First time buyer relief is a government scheme that reduces or eliminates the stamp duty land tax you pay when purchasing your first home. Introduced to help more people onto the property ladder, it applies across England and Northern Ireland and offers substantially better rates than the standard SDLT bands.

Under the relief, you pay 0% on the first £425,000 of a property's purchase price, and 5% on the portion from £425,001 to £625,000. If the property costs more than £625,000, you lose the relief entirely and pay the standard residential rates instead. This threshold is particularly relevant in London, where property prices in many boroughs sit close to or above this ceiling.

To qualify, both you and anyone else you're buying with must be first-time buyers—meaning neither of you has ever owned a freehold or leasehold interest in a residential property anywhere in the world. Joint purchases where one party already owns property will not qualify for the relief. The property must also be your main residence, not a buy-to-let or second home.

You can find the current statutory thresholds and eligibility criteria on the gov.uk SDLT guidance pages, which HMRC updates whenever rates change. We always recommend checking these official sources before exchanging contracts, as parliamentary budgets can alter thresholds.

How Much Is Stamp Duty for First-Time Buyers in London?

The amount you pay depends entirely on your purchase price. For a £400,000 flat in Zone 2, you would pay £0 in stamp duty as the entire amount falls within the first-time buyer nil-rate band. For a £500,000 property, you pay 0% on the first £425,000 and 5% on the remaining £75,000—totalling £3,750.

If you're purchasing at £625,000, the maximum price eligible for relief, you pay nothing on the first £425,000 and 5% on the £200,000 above that threshold, resulting in £10,000 stamp duty. This compares favourably to the standard residential rate, which would charge you £21,250 on the same property—a saving of £11,250.

Once your purchase price exceeds £625,000, you lose first-time buyer relief completely and pay standard rates: 0% up to £250,000, 5% on £250,001–£925,000, 10% on £925,001–£1.5 million, and 12% above that. For a £650,000 property, you would pay £20,000 in stamp duty under standard rates, making the £625,000 threshold a critical boundary for many London buyers.

Our team frequently advises clients to use a stamp duty calculator to model different scenarios. You can explore these calculations using our [stamp duty calculator](/tools/stamp-duty-calculator), which accounts for first-time buyer relief and shows exactly what you'll owe at exchange.

Check Your Eligibility Before You Start House-Hunting

Before committing to viewings or instructing solicitors, confirm that you meet the eligibility criteria for first time buyer relief. HMRC defines a first-time buyer as someone who has never owned an interest in a residential property, whether in the UK or abroad. This includes inherited property, shared ownership stakes, and properties received as gifts.

If you're buying with a partner, spouse, or friend, all parties must individually qualify as first-time buyers. If even one person on the title has previously owned property, none of you can claim the relief. This often catches cohabiting couples by surprise, so it's worth having an honest conversation early in the process.

The property must be intended as your only or main residence. Buy-to-let purchases, second homes, and investment properties do not qualify, and higher SDLT rates apply instead. If you're considering a new home under the first home scheme—a separate government initiative offering discounted properties to local first-time buyers and key workers—you may still benefit from stamp duty relief, provided the purchase price remains within the £625,000 ceiling.

We recommend speaking with a solicitor or conveyancer at the outset to confirm your status, especially if you've lived abroad, inherited property, or had complex living arrangements. Getting this wrong can result in penalties from HMRC.

Calculate What You Can Afford Including All Costs

Stamp duty is only one element of your upfront costs when buying in London. You'll also need funds for a deposit (typically 5%–20% of the purchase price), solicitor and conveyancing fees (often £1,500–£3,000), surveyor costs (£400–£1,500 depending on the type of survey), mortgage arrangement fees, removal costs, and an initial reserve for repairs or furnishings.

Many first-time buyers focus on saving the deposit and overlook these additional expenses, only to find themselves stretched thin at exchange. Building a comprehensive budget that includes stamp duty from the start ensures you're not caught short when your solicitor requests funds.

Use our [affordability calculator](/tools/affordability-calculator) to understand what size mortgage you might qualify for based on your income and outgoings. Then layer in the deposit and stamp duty to see the total cash you need upfront. For example, a £450,000 flat requires a 10% deposit (£45,000) plus £1,250 stamp duty, plus ancillary costs—closer to £50,000 in total.

If you find the property you love sits just above the £625,000 threshold, consider whether negotiating the price down could unlock the relief. A reduction from £630,000 to £625,000 transforms your stamp duty bill from £21,500 to £10,000, a saving that often makes negotiation worthwhile.

Complete Your Purchase and Submit Your SDLT Return

Once you've found your new home and your offer has been accepted, your solicitor or conveyancer will handle the stamp duty process on your behalf. They will prepare and submit your SDLT return to HMRC, claiming first-time buyer relief where applicable, and arrange payment from the funds you provide at completion.

You must pay stamp duty within 14 days of completion—the day you receive the keys and legal ownership transfers. Your solicitor will typically request the funds in advance and settle the bill as part of the completion statement. Missing this deadline incurs penalties and interest from HMRC, so ensure your finances are in order well before exchange.

Your solicitor will also register the property with HM Land Registry, a separate process that follows the SDLT payment. Once HMRC confirms receipt and processes your return, you'll receive an SDLT certificate (sometimes called an SDLT5 certificate), which your solicitor will use to finalise Land Registry registration.

If you're purchasing a new home directly from a developer as part of a new-build scheme, the process is identical, though developers often have preferred solicitor panels. You still benefit from first-time buyer relief on new builds, provided the price and eligibility conditions are met. You can explore mortgage options for your purchase using our [mortgage calculator](/tools/mortgage-calculator) to understand monthly repayment scenarios at different rates.

What Happens If Your Circumstances Change After Purchase

If you claimed first-time buyer relief but later discover you weren't eligible—perhaps you forgot about a property owned years ago or inherited abroad—you must inform HMRC and pay the difference, plus interest and potential penalties. HMRC has the power to investigate SDLT returns and can request evidence of your first-time buyer status.

Similarly, if you purchase a property intending it as your main residence but then rent it out or buy another home within a short period, HMRC may challenge your claim. Always keep records of your intent and occupancy, including utility bills, council tax records, and correspondence with your solicitor.

If you sell your first home and purchase another, you will no longer qualify for first-time buyer relief on the second purchase. You'll pay standard residential SDLT rates, or higher rates if you own more than one property at the time of purchase. Understanding this trajectory helps with long-term financial planning, especially if you anticipate moving within a few years.

Our team at Seymont London supports buyers throughout the entire journey, from initial search to completion and beyond. We work alongside your solicitor and mortgage broker to ensure the process runs smoothly, and we're always available to answer questions about costs, timing, and next steps. Explore our [buying services](/buy) to see how we help first-time buyers navigate London's market with confidence.

Frequently asked

Do I qualify for first-time buyer relief if I've inherited a property?: No. If you've ever owned a residential property—including through inheritance—you no longer qualify as a first-time buyer for stamp duty purposes, even if you sold or gave away that property. HMRC's definition is strict and applies to any interest in residential property anywhere in the world.
Can I use the first home scheme and claim stamp duty relief?: Yes, provided the property you're buying under the first home scheme costs £625,000 or less and you meet the first-time buyer criteria. The first home scheme offers discounted properties to eligible buyers, and stamp duty relief can apply on top of that discount, reducing your upfront costs further.
What if the property I want costs £626,000—can I negotiate to qualify?: If you can negotiate the purchase price down to £625,000 or below, you will qualify for first-time buyer relief and save significantly on stamp duty. A £1,000 reduction in price can cut your stamp duty bill by over £11,000, making negotiation highly worthwhile near the threshold.
How much is stamp duty if I'm buying with someone who already owns a property?: You will not qualify for first-time buyer relief if any co-buyer has previously owned property. Instead, you'll pay standard SDLT rates, and if your co-buyer still owns another property at the time of purchase, you may also pay the 3% higher rate surcharge on top.
When do I pay stamp duty—at exchange or completion?: Stamp duty is due within 14 days of completion, not exchange. Your solicitor will usually collect the funds from you ahead of completion and pay HMRC on your behalf as part of the settlement process.
How do I know the current stamp duty thresholds are still correct?: SDLT thresholds can change in government budgets. Always check the latest rates on gov.uk or consult your solicitor before exchanging contracts. HMRC publishes updates whenever rates are revised, and our stamp duty calculator is updated in line with official changes.