Who qualifies as a first-time buyer in the UK?

By Mark Carney. January 7, 2025.

In recent years, the combination of rising property prices and interest rates has made it increasingly difficult for many to get onto the property ladder. According to Uswitch, the average age of first-time buyers in England rose to 34 in 2022-23. Fortunately, if you’re planning to buy your first home, financial support is available. In this article, we’ll explain what first-time buyers’ relief (FTBR) is and how you can apply to benefit from it.

Who qualifies as a first-time buyer in the UK?

To be considered a first-time buyer in the UK, you must not have previously owned property anywhere in the world. This includes properties you may have been gifted or inherited in the past. You can only claim first-time buyer relief if you’re purchasing a single property that you plan to use as your main residence. FTBR cannot be applied to buy-to-let properties, commercial properties, or properties priced over £625,000. If you’re buying a property jointly, the other person must also meet the first-time buyer criteria. If you’re uncertain about your eligibility, our mortgage advisors can offer clear and helpful guidance.

What is First-Time Buyers’ Relief?

When purchasing a property, you are generally required to pay Stamp Duty Land Tax (SDLT) based on the property’s purchase price, unless you qualify for tax relief.

First-time buyer relief can either reduce or completely eliminate the amount of stamp duty that first-time buyers need to pay.

If you purchase a property priced below the threshold where SDLT applies, no tax will be due.

Until March 31, 2025, first-time buyers purchasing properties valued up to £425,000 do not need to pay any stamp duty.

For properties priced between £425,000 and £625,000, a stamp duty rate of 5% applies, but only on the portion exceeding £425,000.

From April 1, 2025, the SDLT threshold for first-time buyers will be reduced to £300,000 when purchasing a residential property worth £500,000 or less. In this case, stamp duty will be charged at 5% on the portion between £300,000 and £500,000.

If the purchase price exceeds £500,000, first-time buyers will no longer be eligible for relief.

For more information on Stamp Duty Land Tax, refer to the Government’s official guidance.

These changes were introduced following the Chancellor of the Exchequer’s Autumn Budget presented to Parliament on October 30, 2024.

Is first-time buyers’ relief still available?

Yes, as of October 2024, first-time buyer relief is still available to those who meet the eligibility criteria.

What benefits do I get as a first-time buyer?

Given the challenges of entering the property market, there are several schemes designed to assist first-time buyers.

Along with first-time buyer relief, you may also be eligible for a Lifetime ISA to help you save towards your first home.

The First Homes Scheme provides eligible buyers with a discount on new-build properties.

If you’re unsure which option best suits your financial situation and needs, contact your mortgage adviser.

How to Claim First-Time Buyers’ Relief

To claim first-time buyers’ relief, you need to complete a Stamp Duty Land Tax return and submit it within 14 days of purchasing the property.

Even if no stamp duty is due, a return must still be submitted.

Typically, your solicitor or conveyancer will handle the completion and submission of your return. If you’re eligible for the relief, make sure to confirm with your solicitor or conveyancer that they will apply it on your behalf.

If you require any further assistance or support, please contact your mortgage adviser today.