SDLT Relief Rates: 0% on £425k, 5% on £

SDLT First-Time Buyer Relief Rates

If first-time buyer relief applies, SDLT is not always reduced to nil. Instead, special rate bands apply, and the tax due depends on both the purchase price and the effective date of the transaction.

• Under the current rates in the source material, SDLT is 0% on the first £425,000 and 5% on the amount above £425,000 up to £625,000.
• This means a qualifying buyer pays no SDLT only if the price is £425,000 or less.
• For example, a qualifying purchase at £450,000 would produce SDLT of £1,250, while a purchase at £600,000 would produce SDLT of £8,750.
• For purchases from 22 November 2017 to 22 September 2022, earlier relief rates applied: 0% on the first £300,000 and 5% on the amount above that up to £500,000.
• The main practical issue is using the correct date-based rates and not assuming that first-time buyer relief removes SDLT from the whole transaction.

Scroll down for the full analysis.

SDLT first-time buyer relief: the rates that apply when the relief is available

This page explains the SDLT rates that apply if first-time buyer relief is available on a purchase of a dwelling. The point is simple but important: the relief does not remove SDLT entirely in every case. It changes the rate bands, and the amount of tax depends on the purchase price and the date of purchase.

What this rule is about

SDLT on residential property is normally charged by applying different rates to different slices of the purchase price. Where first-time buyer relief is available, special rates apply instead. This can reduce the tax significantly, but only within the limits set by the rules.

The source material here deals only with the rates that apply once the relief is available. It does not set out the separate qualifying conditions for first-time buyer relief. So the starting point is that you must first establish that the relief actually applies.

What the official source says

The official material states that, where the relief is available, the SDLT rates are:

• 0% on the first £425,000 of the purchase price, and
• 5% on the amount above £425,000 up to £625,000.

The source also gives an example. If a first-time buyer purchases a dwelling for £600,000, the SDLT is £8,750. That is because:

• the first £425,000 is charged at 0%, and
• the remaining £175,000 is charged at 5%.

The source also records the earlier rates that applied for purchases from 22 November 2017 to 22 September 2022. During that period, where relief was available, the rates were:

• 0% on the first £300,000, and
• 5% on the amount above £300,000 up to £500,000.

What this means in practice

If first-time buyer relief applies, you do not simply look at the ordinary residential SDLT rates. Instead, you use the special first-time buyer bands for the relevant period.

For current transactions covered by the source material, that means no SDLT is charged on the first £425,000 of the price. If the price is more than £425,000, SDLT is charged at 5% on the slice above that figure, up to £625,000.

This matters most for purchases above £425,000. A buyer may still have a tax bill even though relief applies. The relief reduces the bill by giving a 0% band up to £425,000, but it does not make the whole transaction tax-free unless the price is at or below that figure.

The date of purchase also matters. The source expressly shows that different rate bands applied between 22 November 2017 and 22 September 2022. So if you are looking at an older transaction, you must use the rates in force at that time, not the current ones.

How to analyse it

A sensible way to approach this is:

• First, confirm that first-time buyer relief is actually available. This page assumes that point has already been established.
• Second, identify the effective date of the transaction, because the applicable rate bands have changed over time.
• Third, identify the purchase price that SDLT is being calculated on.
• Fourth, apply the special first-time buyer rates for the relevant period to the appropriate slices of that price.

Questions worth asking include:

• Is this a transaction to which the current £425,000 and £625,000 figures apply, or does it fall within the earlier period?
• Is the price high enough that part of it falls into the 5% band?
• Are you mistakenly assuming that relief means no SDLT at all?

Example

Illustration: a qualifying first-time buyer purchases a dwelling for £450,000.

Using the rates in the source material, the SDLT would be:

• 0% on the first £425,000 = £0
• 5% on the remaining £25,000 = £1,250

Total SDLT: £1,250.

For comparison, the source’s own example uses a purchase price of £600,000. In that case, the tax is £8,750 because only the amount above £425,000 is charged at 5%.

Why this can be difficult in practice

The rates themselves are straightforward. The difficulty is usually not the arithmetic but making sure you are using the right regime.

One common source of error is using the wrong date-based thresholds. The source makes clear that the first-time buyer rate bands changed after 22 September 2022. Older transactions must be tested against the earlier figures.

Another common misunderstanding is to treat the relief as if it eliminates SDLT on the whole purchase. It does not. It changes the rates for the relevant slices of the price.

This page is also limited in scope. It tells you what rates apply where relief is available, but it does not answer the separate and often more fact-sensitive question of whether the buyer qualifies for first-time buyer relief in the first place.

Key takeaways

• If first-time buyer relief is available, special SDLT rates apply instead of the ordinary residential rates.
• Under the rates set out in the source, the first £425,000 is charged at 0% and the slice above that up to £625,000 is charged at 5%.
• For purchases from 22 November 2017 to 22 September 2022, different first-time buyer bands applied, so the transaction date matters.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT Relief Rates: 0% on £425k, 5% on £

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