Angel Thomas
Principal Adviser, In2Equity Ltd
Stamp duty is the tax most first-time buyers underestimate, because it is layered rather than flat. Get the numbers wrong and you can find £10,000 of tax you had not budgeted for, at exactly the point you are trying to find a deposit.
Here is how the relief works in October 2026, where it stops, and the one trap that catches joint buyers every month.
What first-time buyers pay now
If you are a first-time buyer purchasing a main residence, you pay no stamp duty on the first £425,000. Between £425,000 and £500,000 you pay 5%. Buy above £500,000 and you lose the relief entirely, and the standard residential rates apply on the whole purchase price, not just the excess.
That last point is the cliff edge. A property at £495,000 as a first-time buyer costs you £3,500 in duty. The same property at £505,000 can cost you over £15,000, because the relief falls away and the full rate applies from zero. The £10,000 you 'saved' by offering more can cost you £12,000 in tax.
The £500,000 threshold
The £500,000 figure is hard. Once your purchase price crosses it, the relief is gone. In London and the South East, where the average first-time buyer property can sit close to that line, this matters every single week. We model the duty on both sides of the threshold before you make an offer.
The surcharge interaction
If you already own another property, the 3% (or 5%) additional dwelling surcharge applies on top. Some buyers assume being a 'first-time buyer' overrides the surcharge, it does not. If you have, or have had, a property interest, the surcharge sits on top of the standard rates.
The joint-buyer trap
For joint buyers, both must meet the first-time buyer definition. If one of you has owned a property before, anywhere, the relief is lost for the whole purchase. We see this most often with couples where one partner kept a flat from a previous relationship. The solution is not to pretend, it is to structure around it with a JBSP or a single applicant where the numbers allow.
What we do
We run the duty calculation against your specific purchase price, ownership history and joint structure before you commit. No surprises on completion day, no £10,000 tax bills you hadn't planned for. If the relief genuinely does not apply, we tell you the real number and model whether the purchase still works.