The stamp duty relief designed to help first-time buyers onto the housing ladder is now covering significantly fewer homes. According to analysis reported by Property Industry Eye, the proportion of properties priced within the zero-rate threshold for first-time buyers (FTBs) has dropped from 62% to 41% since the April 2025 threshold change - a shift that is adding thousands of pounds to the upfront cost of buying in higher-priced areas.
What Changed and What the Numbers Mean
In April 2025, the temporary stamp duty land tax (SDLT) threshold increase introduced in September 2022 expired. The FTB zero-rate band for properties in England dropped from £425,000 back to £300,000. For properties between £300,001 and £500,000, first-time buyers now pay 5% SDLT on the portion above £300,000.
The practical impact is significant. A FTB buying at £350,000 now pays £2,500 in stamp duty (5% of the £50,000 above the threshold) - where previously they would have paid nothing. A buyer at £400,000 now faces a £5,000 bill. That is not a small sum on top of solicitor fees, survey costs, and a deposit.
Since the threshold changed, an estimated £408m has been paid in SDLT by first-time buyers on homes that would previously have been exempt, according to Property Industry Eye's analysis. That figure represents a real transfer of wealth from buyers to the Treasury.
Where the Burden Falls
The hit is not evenly distributed. London buyers account for just over half of that £408m, with the South East contributing around a quarter. In contrast, the North East and East Midlands make up a much smaller share - because a far higher proportion of properties in those regions still fall below the £300,000 threshold.
If you are buying in London or the South East, the numbers above are directly relevant. If you are investing in Northern cities or Midlands towns, the practical impact is more limited - though worth checking property by property.
The industry has renewed calls for stamp duty reform following these figures. There is an argument that a single national threshold takes no account of the vast regional differences in house prices, and that a buyer in Manchester paying the same threshold limit as a buyer in Kensington is not being treated equitably. Whether any autumn budget delivers a change is speculative - but the pressure is growing.
What to Check Before You Buy
Work out the stamp duty liability on any property before you proceed. For a FTB in England buying under £300,000, the position is unchanged - zero SDLT. For anything above that, the 5% rate kicks in on the excess. The full SDLT rate schedule and an official calculator are available at gov.uk.
One important note on jurisdiction: these thresholds apply to England and Northern Ireland only. Scotland operates a separate Land and Buildings Transaction Tax (LBTT) with different rates and thresholds, and Wales has the Land Transaction Tax (LTT). If you are buying outside England, check the relevant devolved rules.
Speak to your accountant about your specific position - particularly if you are buying with a partner where one party already owns property, as joint ownership may alter the relief available.
