Thousands of first-time patrons pay £5,000 or extra in stamp responsibility up to now 12 months

Nearly 37,000 first-time buyer property purchases were hit with stamp duty in 2024/25, new data shows. 

Of the first-time buyers affected, more than 13,000 paid £5,000 or more in stamp duty tax.  

A Freedom of Information request by Plum of HM Revenue & Customs data revealed the average stamp duty paid by first time buyer relief claimants who had liable transactions in 2024/25 was £4,073. 

In total, 36,999 transactions benefitting from first-time buyer relief were subject to stamp duty, equating to around one in four.  

These included 24,955 where the tax was £2,000 or more, and 13,529 where the tax was £5,000 or more.

There were 1,285 relief claims where the first-time buyers got slapped with the maximum tax of £10,000, Plum said.

Plum added: ‘First-time buyer stamp duty bills are now set to soar even further as new relief thresholds which took effect in April begin to bite.’ 

Purchases above the nil rate band of £425,000 were subject to reduced stamp duty of 5 per cent, with standard rates applying to homes with a purchase price of more than £625,000.

But from 1 April 2025, the nil-rate threshold was cut from £425,000 to £300,000, with relief lost entirely for properties with a value of more than £500,000. 

These changes have dragged thousands of buyers, who previously could have avoided stamp duty, into HMRC’s net, with areas such as London and the south east of England disproportionately affected because of their elevated house prices.

Rajan Lakhani, a personal finance expert at Plum, said: ‘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.’

Separate findings from Coventry Building Society in November revealed that homebuyers in all categories paid £12.3billion in stamp duty between January and October 2025. This represented a 21 per cent rise from the £10.2billion paid over the same period the previous year.

We’ll use our Lifetime Isa to help cover any stamp duty 

Bank worker Olga Demi, 37, renting in Essex, wants to buy a home in Essex with her partner Scott, who is in his 40s, is self-employed and works in construction. 

The couple are looking at properties priced in the region of £380,000.

Olga earns £40,000 annually and has built a Lifetime ISA pot of £15,600 with Plum after four years of saving.

She told This is Money: ‘We live in Essex and currently rent a three-bedroom house with a garage and a small garden. 

‘Although it’s classed as a three-bedroom property, it’s quite compact and really suited to two people.

‘We’ve been incredibly lucky with our landlord, who hasn’t increased the rent in almost a decade. 

‘We currently pay £800 a month, which is significantly below current market rates for similar properties. 

‘That stability has been a major factor in allowing us to save for a deposit, and we’re very aware that this is not the experience most renters have.’

Olga’s Lisa account includes government bonuses of £3,120, which covers most of the £4,000 the couple would pay in stamp duty as first-time buyers.

She said: ‘Stamp duty costs can push buyers below key lending thresholds, meaning higher loan-to-value ratios and less attractive mortgage rates. 

‘It just makes buying a home even harder.

‘That’s why the Government bonus from LISA saving can be such a godsend. The £3,120 of free money from our LISA covers a huge chunk of our entire stamp duty bill.

‘Without those LISA top-ups, we’d just have to save for much longer or alternatively compromise on the kind of home we want, so it’s made a huge difference to how confident I feel about buying.’

Olga said that the biggest challenge she had faced trying to get on the property ladder was ‘believing that it was achievable at all.’

She said: ‘Property prices feel intimidating, especially in the south east, and it’s difficult to know where to start when you’re not already on the ladder.

‘Another challenge will be adjusting to a higher monthly cost, as our rent is unusually low. Our landlord is now planning to sell the property, so the timing has aligned. We’re looking to buy this year just as the property is being sold. Without the stability we’ve had as renters, we wouldn’t be in this position.

‘Ideally, we’d like a similar type of house to what we have now, but slightly larger. Being closer to good train links is important, as I commute into London for work. A driveway would be ideal, but that may be something we have to compromise on depending on what’s affordable in the areas we’re considering.’    

How stamp duty works for first-time buyers

The amount of stamp duty you pay depends on the property price and what kind of buyer you are. 

Stamp duty is calculated in a similar way to income tax. This means you pay different rates on different portions of the property price, with nothing to pay on the first £125,000.  

Since 1 April 2025, first-time buyers in England and Northern Ireland pay no stamp duty on homes up to £300,000.

For homes priced between £300,001 and £500,000, a 5 per cent rate applies to that portion.

If the property price is over £500,000, first-time buyers cannot claim the relief and will need to follow the rules for people who have bought a home before.