A quarter of FTBs paid stamp duty before last year’s shake-up – Mortgage Strategy

Almost 37,000 first-time buyers were liable for stamp duty in the year to last April, with an average bill of £4,073, new analysis suggests.

A Freedom of Information request by money app Plum revealed that approximately one in four first-time buyers had to pay the tax.

However, the data does not capture any first-time buyers who bought homes for more than £625,000.

Plum looked at the number of buyers who claimed first-time buyer relief, which was available on homes bought for between £425,001 and £625,000 in the 2024/25 tax year.

Those first-time buyers paid a reduced stamp duty rate of 5%.

Plum’s FOI analysis found that almost 25,000 first-time buyers paid £2,000 or more, around 13,500 paid over £5,000 and almost 1,300 paid £10,000.

At that point, first-time buyers purchasing homes worth up to £425,000 did not have to pay any stamp duty at all, due to the nil-rate band.

First-time buyers purchasing homes worth £625,001 or more had to pay standard stamp duty rates.

But since then the rules have changed.

In April last year, the nil-rate band was lowered to £300,000, meaning all first-time buyers purchasing homes over this price threshold have to pay stamp duty.

Between £300,001 and £500,000, first-time buyers currently pay a reduced stamp duty rate of 5%.

Following last year’s changes first-time buyers purchasing homes worth £500,001 or more no longer receive any tax relief and have to pay full stamp duty rates.

Plum personal finance expert Rajan Lakhani says: “Stamp duty has long been one of the most hated taxes there is, but the pain faced by first-time buyers is particularly acute given the financial challenges they already face in raising a deposit.

“These figures make you wonder how many are being shut out of the housing market completely because they simply can’t afford the stamp duty.

“Worse still, the new stamp duty relief thresholds mean tax bills are only going to grow bigger in the years ahead as rising house prices mean more and more first-time buyers lose entitlements to stamp duty relief altogether.”