Home mover breakdown — band by band
Stamp Duty Land Tax is a banded tax. Only the portion of the purchase price within each band is taxed at that band's rate — not the full price at a single rate. For a £500,000 home mover purchase:
| Band | Rate | Taxable amount | Tax on band |
|---|---|---|---|
| £0 – £125,000 | 0% | £125,000 | £0 |
| £125,001 – £250,000 | 2% | £125,000 | £2,500 |
| £250,001 – £925,000 | 5% | £250,000 | £12,500 |
| Total stamp duty (home mover) | £15,000 | ||
The effective rate is 3.00% of the total purchase price — below the 5% marginal rate because the first £125,000 is nil-rated and the next £125,000 is taxed at only 2%.
First-time buyer breakdown
First-time buyers benefit from an enhanced nil-rate threshold of £300,000 (for properties up to £500,000). On a £500,000 purchase, this is the maximum price at which first-time buyer relief applies — any penny above £500,000 removes the relief entirely:
| Band | FTB rate | Taxable amount | Tax on band |
|---|---|---|---|
| £0 – £300,000 | 0% | £300,000 | £0 |
| £300,001 – £500,000 | 5% | £200,000 | £10,000 |
| Total stamp duty (first-time buyer) | £10,000 | ||
To qualify for first-time buyer relief: every buyer named on the purchase must be a first-time buyer who has never previously owned a residential property anywhere in the world. If one buyer in a joint purchase has previously owned, the full standard rate of £15,000 applies. The property must also be used as the buyer's main residence.
Critical threshold warning: £500,000 is the hard upper limit for first-time buyer relief. A property priced at £500,001 attracts the full standard SDLT rate of £15,000 with no first-time buyer reduction. If you are buying close to £500,000, check the exact completion price carefully.
Additional property breakdown
Buyers of a second home, buy-to-let property, or any additional residential property pay a surcharge of 5 percentage points on top of the standard rates. This surcharge applies even to the normally nil-rated first band — so additional property buyers pay on every pound from £1:
| Band | Rate (standard + 5%) | Taxable amount | Tax on band |
|---|---|---|---|
| £0 – £125,000 | 5% | £125,000 | £6,250 |
| £125,001 – £250,000 | 7% | £125,000 | £8,750 |
| £250,001 – £925,000 | 10% | £250,000 | £25,000 |
| Total stamp duty (additional property) | £40,000 | ||
The effective rate for additional property at £500,000 is 8.00%. The additional property surcharge has a significant impact on buy-to-let yield calculations — £40,000 upfront reduces the cash-on-cash return, particularly in the first years of ownership. Use the rental yield calculator to model this alongside rental income.
How £500,000 compares across buyer types and price points
The table below shows SDLT across a range of purchase prices around the £500,000 level, using current SDLT bands for England (2026):
| Purchase price | Home mover | First-time buyer | Additional property |
|---|---|---|---|
| £350,000 | £7,500 | £2,500 | £25,000 |
| £400,000 | £10,000 | £5,000 | £30,000 |
| £450,000 | £12,500 | £7,500 | £35,000 |
| £500,000 | £15,000 | £10,000 | £40,000 |
| £525,000 | £16,250 | £16,250 ✗ | £42,500 |
| £600,000 | £20,000 | £20,000 ✗ | £50,000 |
| £750,000 | £27,500 | £27,500 ✗ | £65,000 |
✗ No first-time buyer relief applies above £500,000 — full standard rates are charged.
The cliff-edge at £500,001 is clearly visible: a buyer purchasing at £500,000 pays £10,000 as a first-time buyer, while a purchase at £500,001 costs £15,000 — an immediate jump of £5,000 with no transitional relief. Home movers and additional property buyers are not affected by this threshold.
Is £500,000 a critical threshold to negotiate?
For first-time buyers only, £500,000 is one of the most important SDLT thresholds in the entire residential market. The FTB relief saving at £500,000 is £5,000. However, at £500,001 the FTB pays the full standard rate, losing that saving entirely.
If you are a first-time buyer with an offer accepted at £500,001–£510,000, it is worth asking whether the vendor would accept £500,000 exactly to unlock the FTB relief. The £5,000 saving is real money — equivalent to several months of mortgage overpayments on a typical loan. Whether a vendor would agree depends entirely on their own position and motivation.
For home movers, the nil-rate band ends at £125,000 — far below a £500,000 purchase price. There is no meaningful threshold to negotiate around at this price point for a home mover.
FTB joint purchase check: If you are buying jointly and one buyer has previously owned a property anywhere in the world, no first-time buyer relief applies. Both buyers must individually qualify. This is particularly relevant for joint purchases where one partner owns a property abroad.
Budgeting your total upfront costs at £500,000
A £500,000 purchase requires careful cash planning — the upfront costs are substantial. Stamp duty alone accounts for £15,000 (home mover) or £10,000 (first-time buyer), all of which must be funded separately from the deposit:
- Deposit — at 10% this is £50,000; at 15% it is £75,000; at 20% it is £100,000.
- Stamp duty — £15,000 (home mover), £10,000 (FTB), or £40,000 (additional property)
- Solicitor and conveyancing fees — typically £2,000–£4,000 at this price point
- Survey costs — a homebuyer report costs £500–£900; a full structural survey costs £800–£1,800 on a £500k property
- Mortgage arrangement fee — up to £1,000–£2,000 depending on the product
- Removal, initial furnishing, and contingency — budget £3,000–£8,000
A first-time buyer purchasing at £500,000 with a 10% deposit needs approximately £50,000 deposit + £10,000 SDLT + £3,000 legal and survey costs = around £63,000–£65,000 in total liquid savings before moving-in costs. Use the deposit savings calculator to model your savings timeline.
Frequently asked questions
How much stamp duty on a £500,000 house in 2026?
Do first-time buyers pay stamp duty on a £500,000 property?
What happens to stamp duty above £500,000 for first-time buyers?
How much does an additional property buyer pay at £500,000?
When do you pay stamp duty on a £500,000 purchase?
Is stamp duty the same on the entire £500,000, or just part of it?
Is stamp duty the same in Scotland and Wales?
Mortgage requirements at £500,000
Stamp duty is only one part of the upfront cost calculation for a £500,000 purchase. The mortgage requirement depends on deposit size, and each deposit level implies a different income and rate:
| Deposit | Deposit amount | Mortgage required | Income needed at 4.5× | Monthly repayment at 4.5%, 25yr |
|---|---|---|---|---|
| 10% | £50,000 | £450,000 | £100,000 | ~£2,500/mo |
| 15% | £75,000 | £425,000 | ~£94,500 | ~£2,361/mo |
| 20% | £100,000 | £400,000 | ~£88,900 | ~£2,222/mo |
| 25% | £125,000 | £375,000 | ~£83,300 | ~£2,083/mo |
Income figures above are gross combined incomes for joint purchasers (or sole income for a single buyer) at a 4.5× multiple. Some specialist lenders offer 5× for higher earners: at 5×, a £450,000 mortgage requires £90,000 combined income. Monthly repayments shown are approximate and based on capital repayment; actual figures depend on the exact rate and term.
Lenders also stress-test affordability at higher rates — typically 7–8% — to check whether the repayment remains manageable if rates rise. A £450,000 mortgage stress-tested at 7.5% over 25 years produces a monthly payment of approximately £3,300, which most lenders require to be below 40–45% of net monthly income. Run the mortgage affordability calculator to check whether your income and outgoings pass the stress test at these levels.
SDLT and the completion timeline: when must funds be available?
Unlike the deposit, which is transferred at exchange of contracts, stamp duty is paid at completion — but your solicitor needs the funds in their client account before completion day. Understanding the timeline prevents last-minute cash shortfalls on a high-value purchase:
- Offer accepted: Your solicitor confirms the exact SDLT amount. For a home mover at £500,000 this is £15,000; for a first-time buyer, £10,000. Both figures are fixed at this point — they will not change unless the completion price changes.
- Pre-exchange (typically 8–12 weeks after offer): Your solicitor will ask you to transfer all funds — deposit plus SDLT plus legal costs — into their client account before exchange of contracts. This is the practical deadline for having your stamp duty ready.
- Exchange of contracts: You are legally committed. If you fail to complete you lose your deposit. SDLT funds should already be with your solicitor by this stage.
- Completion day: Your solicitor transfers the purchase price and pays SDLT using the funds you have provided. The completion statement you receive will itemise the SDLT payment.
- Within 14 days of completion: Your solicitor submits the SDLT return to HMRC and pays the tax. HMRC imposes financial penalties for late submission regardless of whether the solicitor or buyer caused the delay.
Practical note on ISAs and savings accounts: For a first-time buyer, £10,000 held in a Stocks and Shares ISA may take several working days to liquidate and transfer. A Lifetime ISA (LISA) can only be used towards the purchase deposit, not stamp duty — the SDLT portion must come from other savings. Cash ISAs can generally be withdrawn quickly, but allow at least five working days before the exchange deadline.
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