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June 21, 2022
Our latest research has revealed that almost a third more first time buyers are having to pay stamp duty, despite the government’s first time buyer exemption. 30% more first time buyers are paying stamp duty than when first time buyer relief was first introduced 5 years ago. One in four (26%) of all first time buyers now pay stamp duty.
Stamp Duty is the tax levied on the purchase of property and land in England and Northern Ireland.
First time buyer stamp duty relief means that first time buyers buying a home up to £300,000 do not have to pay any stamp duty. If your new home is worth £300,000 to £500,000 you’ll pay 5% stamp duty on the value above £300,000.
Unfortunately, soaring house prices alongside the fact stamp duty bands have stayed the same for 5 years means 30% more aspiring homeowners are having to find thousands of pounds more to get on the property ladder.
Commenting on the data, Paula Higgins, Chief Executive of the HomeOwners Alliance said, “It’s clear that the stamp duty tax needs to be reviewed to ensure it’s facilitating rather than fettering first time buyers.”
“Against a backdrop of soaring house prices, cost of living crisis and increased tax burden, first time buyers of a home worth £400,000 are being hit with stamp duty bills of £5,000.”
“Alongside announcing new initiatives to increase homeownership, the government needs to increase the existing first time buyer relief threshold. The relief was introduced in 2017 to reduce the upfront costs for first time buyers. Fast forward five years and there is a real risk first time buyers become a taxation cash cow, which can’t be right.”
Commenting on the research, a Treasury spokesperson said, “We want to help as many people as possible get onto the housing ladder, which is why we cut stamp duty for 90% of first-time buyers who pay it via first-time buyers relief, as well as investing £10 billion to help unlock over one million new homes.”
“We keep all taxes under review.”
But the data reveals it’s not just first time buyers paying more tax. More homebuyers are being pushed into higher stamp duty bands as house prices soar.
Almost 1 in 5 more homebuyers (+17%) have been pushed into paying higher stamp duty bands. 44% of transactions now fall in bands above £250K; up from 38% two years ago. An additional 31,500 transactions are now subject to stamp duty, compared to 2 years ago.
And 1 in 4 properties (26%) liable for stamp duty are now in bands above £500K; up from 1 in 6 two years ago (16%). These properties are subject to stamp duty rates of between 5 – 12%. (figure 3)
Our research also found that the stamp duty surcharge continues to work as the government first intended: almost half of the stamp duty is paid by the surcharge levied at investors and those buying second homes. The additional properties stamp duty surcharge now makes up 46% of total receipts.
Commenting on the findings that investors – not homebuyers – make up nearly half of all receipts, Paula Higgins said, “We campaigned for the surcharge and continue to agree with the government that those buying a home to live in should be treated differently to those looking to make money out of property or buying a second home.”
The HomeOwners Alliance calls on the government to be bold and scrap stamp duty entirely for those buying a home to live in. But falling short of that, we ask the government to:
Use our calculator to find out how much stamp duty you’ll pay
March 25, 2025 
