A growing number of first-time buyers in the UK are being hit with a stamp duty bill of £5,000 or more, despite Government relief schemes still being in place.
New figures show that almost 37,000 first-time buyers paid stamp duty in the 2024/25 tax year, with thousands facing bills that many say make buying a home even harder.
The latest data, based on HMRC transaction records and obtained by savings app Plum, comes as major rule changes introduced in April 2025 have lowered the tax-free threshold.
That shift is expected to pull even more first-time buyers into paying stamp duty, especially in London and the South East, where property prices remain far higher than the national average.
What do the latest stamp duty figures show for first-time buyers?
The HMRC figures show that in 2024/25, a total of 36,999 transactions qualified for first-time buyer relief but still ended up paying stamp duty anyway.
That means roughly one in four buyers claiming the relief still faced a tax charge.
The data shows:
- Average stamp duty bill: £4,073
- Nearly 25,000 buyers paid £2,000 or more
- 13,529 buyers paid £5,000 or more
- 1,285 buyers paid the maximum first-time buyer charge of £10,000
These numbers highlight how quickly buyers can fall into paying stamp duty once property prices move beyond the relief threshold.
Why are thousands still paying stamp duty even with first-time buyer relief?
First-time buyer relief does not remove stamp duty completely in every case.
Before April 2025, first-time buyers paid:
- 0% stamp duty on homes up to £425,000
- 5% stamp duty on the portion between £425,001 and £625,000
- Standard stamp duty rules applied to properties above £625,000
This meant that many buyers purchasing slightly above the threshold still paid stamp duty, even though they qualified for the relief.
What changed on 1 April 2025, and why does it matter?
The stamp duty rules changed significantly on 1 April 2025, and the impact could be long-lasting for younger buyers trying to get onto the property ladder.
The Government reduced the nil-rate threshold for first-time buyers:
- From £425,000 down to £300,000
- Relief is now removed entirely for properties above £500,000
This means buyers purchasing homes between £300,000 and £425,000 now face stamp duty charges that they would not have paid before.
For many first-time buyers, that could mean an extra few thousand pounds upfront, on top of a deposit, solicitor fees, mortgage arrangement costs, and moving expenses.
How much stamp duty will first-time buyers pay under the new rules?
Even small changes in property value can now create large stamp duty bills. A buyer purchasing a home for £350,000, for example, will now pay stamp duty where previously they may have paid nothing.
This matters because many first-time buyers already struggle to raise a deposit while also dealing with higher mortgage rates compared to the ultra-low rates seen a few years ago.
Which parts of the UK are worst affected by the stamp duty bill increase?
The biggest impact is expected in London and the South East, where average property prices often sit above the new £300,000 threshold.
Many first-time buyers in these areas do not purchase “luxury” homes; they buy modest flats or small terraced houses, but still get pushed into stamp duty because of local market prices.
In London, especially, a first-time buyer can easily exceed £300,000 even for a one-bedroom property.
That makes the stamp duty system feel less like a tax on wealth and more like a tax on basic entry into the housing market.
What are experts saying about stamp duty and first-time buyers?
Plum’s personal finance expert Rajan Lakhani described stamp duty as a major source of frustration for homebuyers.
“Stamp duty is one of the most hated taxes there is, and the pain faced by first-time buyers is particularly acute given the financial challenges they already face in raising a deposit.”
He also warned that the situation may worsen over time as house prices rise.
“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.”
This reflects a growing concern that stamp duty is becoming a bigger barrier to home ownership, not just a cost of buying.
How much stamp duty is the Government collecting overall?
The trend does not stop with first-time buyers. Separate research from Coventry Building Society found that UK homebuyers paid £12.3 billion in stamp duty between January and October 2025.
That figure represented a 21% rise compared with the same period the year before, suggesting that threshold changes and higher property prices are increasing Government tax receipts.
Is stamp duty now pricing first-time buyers out of the market?
Many property analysts believe stamp duty is becoming a serious affordability issue.
First-time buyers already face:
- Higher rents are making it harder to save
- Deposit requirements often exceeding £30,000–£50,000
- Mortgage rates are still above the lows seen in 2020–2021
- Solicitor fees, surveys, broker fees and moving costs
When you add a £4,000 to £10,000 stamp duty bill on top, it can easily become the final hurdle that stops a buyer completing a purchase.
For some, it may also reduce what they can afford, forcing them to choose a smaller home or a less suitable area.
Why did the stamp duty bill hurt even more in London?
Consider a first-time buyer couple looking to buy a two-bedroom flat in Greater London for around £475,000.
Even if they manage to save a deposit and get mortgage approval, the stamp duty bill could still run into thousands of pounds. That money has to be paid upfront, usually within days of completion.
In a market where buyers already feel squeezed, stamp duty can feel like an extra punishment for simply trying to stop renting.
What should first-time buyers do now before buying a home?
Tax specialists say buyers must plan for stamp duty early, rather than treating it as an afterthought.
Anyone buying above £300,000 now needs to include stamp duty in their affordability calculations, especially if they are already stretching their budget to compete in expensive regions.
Mortgage lenders also warn that buyers who drain all their savings on deposit and stamp duty may struggle later with emergency costs, repairs, and rising household bills.
