Stamp duty

The £500,000 cliff

First-time buyer relief applies up to £500,000 and then stops — not tapers, stops. A first-time buyer paying exactly £500,000 owes £10,000. One pound more and they owe £15,000. A single pound of price costs £5,000.

It is the same shape as the childcare cliff and the 60% tax trap: a round number with a large sum sitting on one side of it, and nothing that warns you as you cross.

Buying from overseas

A buyer who was in the UK for fewer than 183 days in the 12 months before completion pays 2% on top. The part that catches people is that it applies to every band, including the zero one — so a £120,000 purchase that a UK resident would pay nothing on costs an overseas buyer £2,400.

It also stacks rather than replaces. An overseas buyer purchasing an additional property at £400,000 pays the standard £10,000 plus £20,000 plus £8,000 — £38,000 in total, against £10,000 for a UK resident buying their only home.

The residence test here is not the one used for income tax, and it can be undone afterwards: spend 183 days in the UK in the 12 months following the purchase and the 2% can be reclaimed. That is a refund claim, not something that happens on its own.

Where this stops

Residential property in England and Northern Ireland only. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax — different taxes with different bands, and applying English rates to them would be confidently wrong.

Not modelled: leasehold premiums, shared ownership, mixed-use and non-residential rates, multiple dwellings relief, company purchases, and the higher rates for corporate buyers. Each is a different calculation rather than a variation on this one. Your conveyancer files the return and is the person to ask.