Your First Home Scheme: How Stamp Duty Works With a 20% Equity Loan
Your First Home is a new £4.7 billion equity loan scheme confirmed in the Autumn Budget 2026, designed to help around 70,000 first-time buyers in England. An equity loan changes how you fund a home, but not its price, so you still need to plan for stamp duty.
How the Scheme Works
- Equity loan: 20% of the price, from the government.
- Deposit: from 2.5%, up to a maximum of 15%.
- Interest: interest-free for five years, with a gradual increase after that.
- Income caps: £110,000 per household outside London and £140,000 in London.
- Price caps: £650,000 in inner London and £500,000 in outer London. Caps elsewhere will be based on local median prices.
Key Dates
- By the end of December 2026: pre-registration opens.
- From February 2027: full applications.
- From April 2027: first loans issued.
Do You Pay Stamp Duty on the Full Price?
We could not find scheme-specific SDLT guidance from the government at the time of writing. Under normal rules, SDLT is based on the price paid for the property, however you fund it, and buyers using the earlier Help to Buy equity loan paid on the full price. Budget on the full price until the rules are confirmed. First-time buyer relief should apply in the usual way if you meet its conditions.
Worked Examples
These examples assume a 2.5% deposit, a 20% equity loan and a first-time buyer purchase on the full price:
| Price | 2.5% deposit | 20% equity loan | 77.5% mortgage | Estimated SDLT |
|---|---|---|---|---|
| £300,000 | £7,500 | £60,000 | £232,500 | £0 |
| £450,000 | £11,250 | £90,000 | £348,750 | £7,500 |
| £500,000 | £12,500 | £100,000 | £387,500 | £10,000 |
| £600,000 | £15,000 | £120,000 | £465,000 | £20,000 |
The £500,000 Trap in Inner London
The inner London price cap of £650,000 is higher than the £500,000 limit for first-time buyer relief. Above £500,000 the relief is lost entirely, so a £600,000 home carries £20,000 in SDLT on our full-price basis. Your deposit may be small, but you would still need to find the tax in cash.
Tip: SDLT cannot normally be added to the equity loan, so build it into your savings target alongside your deposit and legal fees.
Who Should Wait for More Detail?
Price caps outside London and some delivery details are still to come, and legislation is needed for parts of the scheme. Check the official guidance when pre-registration opens, and ask your conveyancer to confirm your SDLT before you exchange.