In recent years, rising property prices and interest rates have made it more challenging for many to enter the property market.
According to Uswitch, the average age of first-time buyers in England increased to 34 in 2022-2023. Fortunately, financial support is available to help make your first home purchase more affordable. In this article, we'll explain what First-Time Buyers' Relief (FTBR) is and how you can apply for it.
Who Qualifies as a First-Time Buyer in the UK?
To be considered a first-time buyer in the UK, you must meet the following criteria:
You have never owned property anywhere in the world, including properties gifted or inherited.
You are purchasing a single property intended as your main residence.
The property cannot be a buy-to-let, commercial, or priced over £625,000.
If you're purchasing a property with someone else, they must also meet the first-time buyer criteria. If you're unsure about your eligibility, our mortgage advisors can provide helpful guidance.
What is First-Time Buyers' Relief (FTBR)?
First-time buyers are typically required to pay Stamp Duty Land Tax (SDLT) based on the property's purchase price. However, FTBR can reduce or eliminate the amount of stamp duty due.
Here’s a breakdown of how FTBR works:
Properties priced below £425,000: No stamp duty is due.
Properties priced between £425,000 and £625,000: Stamp duty is charged at 5% on the portion of the price exceeding £425,000.
Changes from April 1, 2025:
Properties up to £500,000: FTBR will apply with a new threshold of £300,000, and stamp duty will be charged at 5% on the portion between £300,000 and £500,000.
Properties over £500,000: First-time buyers will no longer be eligible for relief.
These changes were announced in the Chancellor's Autumn Budget on October 30, 2024.
Is First-Time Buyers’ Relief Still Available?
Yes, FTBR is still available as of October 2024, as long as you meet the eligibility criteria.
What Additional Benefits Do First-Time Buyers Get?
In addition to FTBR, first-time buyers may be eligible for other schemes to help with homeownership:
Lifetime ISA: A savings account offering bonuses to help you save for your first home.
First Homes Scheme: Provides discounts on new-build properties for eligible buyers.
If you're unsure which option best suits your situation, consult your mortgage advisor.
How to Claim First-Time Buyers’ Relief
To claim FTBR, you need to complete a Stamp Duty Land Tax return within 14 days of purchasing your property. Even if no stamp duty is due, you must still submit the return.
Typically, your solicitor or conveyancer will handle the submission. Be sure to confirm that they will apply FTBR on your behalf if you're eligible.
If you need further assistance, don’t hesitate to contact your mortgage advisor today.
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