Do you qualify for First Time Buyer’s Relief from Stamp Duty Land Tax?
A First Time Buyer is defined by the Revenue as someone who has never owned property anywhere in the world before. So, if you are a First Time Buyer buying a property, you may be eligible for the Relief. There are however other criteria set out:
- You must buy in a personal name, not as a company
- The price cannot exceed £500,000
- The property must be a single dwelling for use as your home, i.e. not as a buy to let
All of the purchasers must meet the criteria and, in the case of a married individual buying in their sole name, their spouse must also meet the criteria. For example, if your parents are helping you to buy your first home and they are taking a share of the property, rather than making a gift or a loan, the Relief will not be available, and indeed higher rates of SDLT may apply.
Where the Relief is available, no SDLT is payable on the first £300,000 of the purchase price. Where the price is higher than £300,000, the SDLT is then payable at 5% on the amount above £300,000. For example, where a First Time Buyer purchases for £350,000, the SDLT would be:
£300,000 at 0% = £0
£50,000 at 5% = £2,500
An ordinary purchaser would be paying £7,500 on the same property so the Relief would save you £5,000.
If you have any questions about whether you are eligible for the First Time Buyer’s Relief, or any other conveyancing queries, please contact Laura Mechen.