First-time buyer relief on stamp duty can never save a buyer more than £5,000, no matter how expensive the home. The 5% surcharge on second homes and buy-to-let purchases has no such limit — it keeps rising in a straight line, however much the property costs. Both come from the same tax, calculated by the same HM Revenue & Customs rate cards, but they are built on completely different structures: one is a capped gift, the other is an uncapped surcharge.
Here's the maths behind both, using Homecost's stamp duty calculator (figures fetched 3 September 2026).
The two numbers side by side
| Price | Standard (mover) | First-time buyer | FTB saves | Additional property (+5%) | Surcharge costs |
|---|---|---|---|---|---|
| £250,000 | £2,500 | £0 | £2,500 | £15,000 | £12,500 |
| £300,000 | £5,000 | £0 | £5,000 | £20,000 | £15,000 |
| £400,000 | £10,000 | £5,000 | £5,000 | £30,000 | £20,000 |
| £500,000 | £15,000 | £10,000 | £5,000 | £40,000 | £25,000 |
| £750,000 | £27,500 | £27,500 | £0 | £65,000 | £37,500 |
| £1,000,000 | £43,750 | £43,750 | £0 | £93,750 | £50,000 |
Two patterns stand out. The "FTB saves" column rises to exactly £5,000 by £300,000, sits flat at £5,000 all the way to £500,000, then drops to £0 — first-time buyer relief is withdrawn entirely above £500,000, not reduced gradually. The "surcharge costs" column never plateaus: it is 5% of the purchase price at every point on the table, from £12,500 at £250,000 up to £50,000 at £1,000,000, and it would keep climbing at the same rate on a £2 million or £5 million purchase.
Why the relief has a ceiling
First-time buyer relief works by charging 0% on the first £300,000 of a purchase, then 5% on the slice between £300,000 and £500,000 (the standard rate a mover pays on the equivalent slice). Because the relief only ever forgives tax on that first £300,000 — and the standard rate on that band tops out at £5,000 — the saving can never be worth more than £5,000, however much the property costs. Buy at £310,000 or £490,000 and the saving is identical. Buy above £500,000 and the relief disappears completely: HMRC treats the purchase as an ordinary move, taxed from £0, with no partial credit for the relief that would have applied lower down. The mechanics of that cliff edge are covered in full in Homecost's guide to the £300,000–£500,000 taper.
Why the surcharge doesn't
The additional-property surcharge works differently: it adds 5 percentage points to every band of the standard rate, including the 0% band. Because it is applied to the whole price rather than forgiven or capped on a single band, there is no ceiling — a buyer purchasing a second home or a buy-to-let pays 5% of the full purchase price on top of the standard bill, whatever that price is. The full band-by-band breakdown is in Homecost's additional property stamp duty surcharge explainer.
Where buyers actually sit on this scale
Land Registry data for 2025 shows how many transactions fall either side of the £500,000 relief cliff. Of 782,603 residential sales recorded in England and Wales last year (HM Land Registry, category A, standard market sales):
- 240,458 sales (30.7%) were priced between £300,000 and £500,000 — the band where first-time buyer relief is worth its maximum flat £5,000.
- 147,181 sales (18.8%) cleared £500,000 — the point at which the relief disappears entirely, whether the buyer is purchasing for £500,001 or £5 million.
- 23,874 sales (3.1%) were £1 million or more, where a first-time buyer and a home mover now pay an identical bill, but a buyer of an additional property pays £50,000 more than either.
What this means in practice
The shapes of the two rules pull in opposite directions as price rises. A first-time buyer gets the same maximum help (£5,000) whether they're buying at £320,000 or £480,000, and no help at all above £500,000. A buyer of a second home or investment property pays proportionally the same 5% surcharge at every price point, so the cash cost of that surcharge keeps growing with the property — from £12,500 on a £250,000 flat to £93,750 on a £1 million house. Try both scenarios on Homecost's stamp duty calculator, or look up a live example on the £400,000 property page for M1 1AE in Manchester to see a first-time buyer, mover and additional-property bill side by side.
This is general information about how stamp duty is structured, not advice on whether or when to buy. Rates, reliefs and thresholds are set by HM Revenue & Customs and can change at future Budgets — speak to a conveyancer or qualified adviser to confirm the exact bill on a specific purchase.
Browse more cost intelligence guides on stamp duty, council tax and the true cost of buying in the UK.