Am I a First Time Buyer?

A first time buyer is defined by HM Revenue & Customs (HMRC) as “an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence”.

From 22 November 2017, when the Stamp Duty Land Tax (SDLT) rules changed, first time buyers paying £300,000.00 or less for a residential property are now entitled to a relief on SDLT which resulted in them paying no SDLT when purchasing a property for up to £300,000.00.

First time buyers paying between £300,000.00 and £500,000.00 will pay SDLT on the purchase price which exceeds £300,000.00. Therefore if a first time buyer purchases a property for any amount over £300,000.00 they are essentially entitled to a £5,000.00 reduction in the SDLT payable.

First time buyers purchasing property for more than £500,000.00 unfortunately will not be entitled to any relief and SDLT will be payable at the normal rates. For further details on the normal rates of SDLT please contact our Conveyancing Department.

Common questions de-bunked:

• I have never owned a property but I am now buying a property jointly with my partner who has previously owned a property. Are we entitled to the stamp duty relief? All buyers, when there are more than one, must be first time buyers. You therefore do not qualify for the stamp duty relief if one of you is not a first time buyer.
• I owned a share in a property under a shared equity/ownership scheme. Am I entitled to the relief? We’re afraid not. This is because you have owned a significant interest in a property.
• I have never purchased a property but I have inherited a property? Again, as you have previously acquired a major interest in a property it is unlikely that you will be entitled to the relief.
• I have never owned a property but I would like to buy one to rent to others. Can I claim the relief? To claim the relief you have to also occupy the property as your main residence, you will therefore not be able to claim the relief if you are buying the property to rent out to others.
• I bought a house jointly with my ex-partner. We have since separated and I’m now with a new partner, who has never owned before. If we buy together can we be treated as a first-time buyers? As you owned a property in the past, you will not be eligible for the stamp duty relief if you decide to buy a property together.

Author: Daniel Fielding-Smith