The huge sums paid in stamp duty by first-time buyers (FTBs) have been revealed for the first time in figures published recently.
Freedom of Information (FOI) data obtained by smart money app Plum revealed that the average stamp duty paid by first-time buyer relief claimants who had liable transactions in 2024/25 was £4,073. In total, 36,999 transactions benefitting from first-time buyer relief were subject to stamp duty (approximately 1 in 4).
These included 24,955 where the tax was £2,000 or more and 13,529 where the tax was £5,000 or more.
There were 1,285 relief claims where the first-time buyers got slapped with the maximum tax of £10,000.
FTB stamp duty bills are now set to soar even further as new relief thresholds which took effect in April begin to bite.
Rajan Lakhani, personal finance expert at Plum, commented: “Stamp duty has long been one of the most hated taxes there is, but the pain faced by first-time buyers is particularly acute given the financial challenges they already face in raising a deposit.
“These figures make you wonder how many are being shut out of the housing market completely because they simply can’t afford the stamp duty.
“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.”
| Tax Paid Band | FTBR Claimant Count |
| £1 – £999 | 5,712 |
| £1,000 – £1,999 | 6,332 |
| £2,000 – £2,999 | 4,447 |
| £3,000 – £3,999 | 4,051 |
| £4,000 – £4,999 | 2,928 |
| £5,000 – £5,999 | 3,170 |
| £6,000 – £6,999 | 2,655 |
| £7,000 – £7,999 | 2,323 |
| £8,000 – £8,999 | 2,260 |
| £9,000 – £9,999 | 1,836 |
| £10,000 | 1,285 |
Source: Plum FOI to HMRC
The FOI data obtained by Plum relates to FTBs qualifying for first-time buyer relief in 2024/25. Purchases above the nil rate band of £425,000 were subject to reduced stamp duty of 5%, with standard rates applying to homes with a purchase price of more than £625,000.
However, from April 1, 2025, the nil-rate threshold was cut from £425,000 to £300,000, with relief lost entirely for properties with a value of more than £500,000. These changes have dragged thousands of homebuyers, who previously could have avoided stamp duty, into the taxman’s net, with areas such as London and the South East disproportionately affected because of their elevated house prices.
Using lifetime ISAs to cover stamp duty
Plum is urging first-time buyers to consider Lifetime ISAs as a means of clawing money back from the government.
Lifetime ISAs (or LISAs) were launched to help people get a foot on the housing ladder or help them save for later life.
To sweeten the deal, the UK Government offers 25% tax relief on the money you save thanks to an income tax reimbursement from HMRC.
A Lifetime ISA saver can invest up to £4,000 every tax year, meaning there’s the potential to earn a maximum bonus of £1,000 annually up until the age of 50.
According to latest annual figures for 2023/24, around 56,900 account holders withdrew from their LISA in order to purchase a first-time property, an increase of around 1,150 on the previous tax year.
Rajan Lakhani said: “There are growing calls for a blanket stamp duty exemption for first-time buyer transactions, but this is probably wishful thinking given the current state of the government’s finances.
“However, with the right planning, you can indirectly get the government to cover some, if not all, of those costs for you. The 25% bonus made available to Lifetime ISA savers could cover most first-time buyers’ stamp duty bills within a few short years of opening an account.
“For example, there were 12,000 first-time buyer transactions last year where relief claimants had stamp duty of less than £2,000. That could have been covered with the free money that comes from two years of maxing out the annual LISA allowance.
“Remember, even a boost of a few hundred pounds can be a major help for a young couple already grappling with the cost of a home survey, or their removal fees.
“The LISA product remains open for new applicants, with the Government expected not to introduce a new housebuying ISA until 2028. But based on similar changes in the past, people who have opened a LISA should still be able to take advantage and earn the bonus”.
Case Study: Olga, 37, from Essex
Bank worker Olga Demi, 37, wants to buy a home in Essex with her partner Scott, who’s in his 40s. The pair are looking at properties priced in the region of £380,000.
Olga earns £40,000 annually and has built a Lifetime ISA pot of £15,600 with Plum after four years of saving.
Her LISA account includes government bonuses of £3,120, which covers most of the £4,000 the couple would pay in stamp duty as first-time buyers.
She said: “Stamp duty costs can push buyers below key lending thresholds, meaning higher loan-to-value ratios and less attractive mortgage rates. It just makes buying a home even harder.
“That’s why the government bonus from LISA saving can be such a Godsend. The £3,120 of free money from our LISA covers a huge chunk of our entire stamp duty bill.
“Without those LISA top-ups, we’d just have to save for much longer or alternatively compromise on the kind of home we want, so it’s made a huge difference to how confident I feel about buying.”
