What is a ‘First Time Buyer’?
To qualify as a ‘First Time Buyer’, you must:-
be buying your first home which you intend to occupy as your main residence;
have never owned or acquired a major interest in a Residential/Mixed use property in the UK or any other country, regardless of the value of that interest; and
Have agreed a Purchase Price of no more than £625,000.
If you have inherited or been gifted a property previously, you will not qualify as a ‘First Time Buyer’.
If you are purchasing a property with another person, and you hope to claim First Time Buyers Relief, all the purchasers in that transaction must meet the above conditions. For example, if person ‘A’ is buying a property with person ‘B’, but person ‘B’ has been gifted a property previously, then both individuals will not qualify as ‘First Time Buyers’. This is because they have both failed to meet the criteria.
SDLT and First Time Buyers
The Autumn Budget plans to reduce the SDLT relief thresholds, currently available for first-time buyers, from 1st April 2025 onwards. Currently, first-time buyers do not pay any SDLT on the first £425,000 of the Purchase Price. From 1st April 2025, this relief will be reduced down to £300,000.
Example:
If you buy a property prior to 1st April 2025 for £425,000, and you meet the criteria above, no SDLT will be payable.
However, following the Autumn Budget, if the same person acquires a property from 1st April 2025 for £425,000, then £6,250 of SDLT will be payable on completion.
As you can see, this will increase the number of first-time buyers paying SDLT.
Time will only tell as to what the impact this will have on young people trying to place themselves on the property ladder, but we suspect such news will come as a bitter disappointment to those individuals and will inevitably delay their purchase by some time.
