Saving hard to make your debut on the property ladder? Our latest research may have uncovered some good news for you.
Almost six out of 10 homes in Great Britain are exempt from stamp duty if they are bought by first-time buyers.
Our research has found that 59% of all properties listed for sale during the past year came with asking prices that were below the threshold at which stamp duty, or its equivalent, kicks in.
In some towns, such as Bootle in Merseyside and Shildon in County Durham, nearly every property was priced at below the stamp duty threshold for first-time buyers.
Laura Howard, our consumer expert, said: “The various first-time buyer tax reliefs across Great Britain have helped put more than 59% of homes firmly in the stamp duty-free zone – or its country’s equivalent.
“Buying your first home is usually the most costly thing you’ll ever do, so the maximum £5,000 saving made possible with this tax relief is welcome; after all it could cover your survey and legal costs.”
A £165,000 three-bedroom house in Bootle, Merseyside where almost every first home is free from stamp duty
Why is this happening?
In a bid to help people buy their first home, the government announced in 2017 that first-time buyers in England purchasing a property for up to £300,000 would be exempt from stamp duty.
Homes costing up to £500,000 would only charge the portion of the property’s value above the £300,000 threshold.
However, first-time buyers who purchase a home for more than £500,000 do not qualify for any discount at all.
Scotland has a similar system, with first-time buyers exempt from paying Land and Buildings Transaction Tax up to a £175,000 threshold, while in Wales the Land Transaction Tax does not apply to any buyer spending up to £180,000 on a home.
This £199,950 three-bedroom detached home is in Shildon, County Durham, where 99.6% of first homes are stamp duty-exempt
Where are first-time buyers least likely to pay stamp duty?
The towns of Bootle in Merseyside and Shildon in County Durham topped the list as the places in which first-time buyers were least likely to have to pay stamp duty with 99.6% of properties for sale here priced under the threshold.
They were followed by Heckmondwike in West Yorkshire at 99.2%, and Blyth in Northumberland and Gateshead in Tyne and Wear, both at 99%.
On a country basis, Scotland had the highest proportion of properties on which first-time buyers would not be liable for tax at 61%, compared with 58% for England and 56% for Wales.
A one-bedroom ground floor flat in London's Purley for £275,000 – sneaking under the first-time buyer stamp duty threshold of £300,000
Where are first-time buyers most likely to have to pay tax?
At the other end of the spectrum, in Beaconsfield in Buckinghamshire just 1.7% of homes listed during the past year had prices below £300,000.
Ingatestone in Essex was not much better at only 2%, followed by Chalfont St Giles in Buckinghamshire in third place with 3.4% of properties priced below the threshold.
While first-time buyers in London are likely to struggle to find many homes priced at below £300,000, they can still qualify for the partial discount on properties listed for up to £500,000.
Despite this only 9.2% of properties in the London Borough of Kensington and Chelsea were priced below this level, followed by just 14.5% in Richmond upon Thames.
But the situation was slightly better in Croydon, and while only 26.8% of properties were listed for less than £300,000, 81.7% were on the market for under £500,000, meaning first-time buyers would benefit from some discount.
Top 3 takeaways
- Six-in-10 homes in Great Britain are exempt from stamp duty, or its equivalent tax, if they are bought by first-time buyers
- In Bootle in Merseyside and Shildon in County Durham nearly every property was priced at below the stamp duty threshold in the past year
- In Beaconsfield in Buckinghamshire just 1.7% of homes listed had prices below the £300,000 level