How Does Stamp Duty Affect First-Time Buyers?
If you are looking for a first-time buyer mortgage, you will be wise to seek the best advice possible, for this will be an unfamiliar transaction to you and there may be many costs and considerations involved that you might not know about.
The affordability of your mortgage is a key consideration and it is important that any judgments on this factor in other issues, such as additional costs. This can include solicitor fees, a survey and the size of the deposit.
Stamp duty is another of these costs and it is important to understand how this affects you as a first-time buyer, although you should also look out for any possible changes in next month’s Budget.
Since April 1st 2025, first-time buyers have paid no stamp duty on any property costing less than £300,000, with this threshold falling from the previous level of £425,000. Any home valued at more than £300,000 but under £500,000 will see you pay five per cent of the value of the property.
Therefore, it should be relatively easy to calculate what you pay. However, this is an important consideration if either your offer or the asking price is very close to one of these thresholds, as that could significantly alter the overall cost of buying and the mortgage that you need.
Conservative Party leader Kemi Badenoch has just pledged that a future Tory government would abolish stamp duty altogether for anyone buying their main home in Britain. Second-home buyers, companies and overseas buyers would still have to pay the tax.
As leader of the opposition, this policy could only be enacted if her party recovers from its present slump in the polls to win the next general election, which may not take place until 2029.
However, this may influence current government policy if Chancellor Rachel Reeves decides she does not want to be outflanked on the issue, which is why it will be worth paying close attention to her speech on November 26th.
