Read the original guidance here:
HMRC SDLT: SDLTM29805 – Introduction to First-Time Buyers’ relief

Introduction to First-Time Buyers’ Relief

First-time buyers can benefit from relief from Stamp Duty Land Tax (SDLT) when purchasing residential property. This guide explains the conditions, amounts, and processes involved.

Key Details of the Relief

The relief from SDLT applies under certain conditions:

• The relief is available for first-time buyers who purchase residential properties between 23 September 2022 and 31 March 2025, with a maximum purchase price of £625,000. To qualify, the buyer must intend to live in the property as their main home.
• Previously, from 22 November 2017 until 22 September 2022, the relief was applicable for properties costing £500,000 or less. After 1 April 2025, the lower threshold of £500,000 will return.

Shared Ownership Properties

First-time buyers purchasing shared ownership properties can also benefit from this relief. The rules are as follows:

• Buyers who choose to pay SDLT on the full market value of shared ownership properties have been eligible for relief since the relief’s introduction.
• From 29 October 2018, the relief was expanded to cover first-time buyers using approved shared ownership schemes. This includes buyers who do not opt to pay SDLT based on market value but instead make payments in stages. This change was backdated to 22 November 2017.

For more information regarding how the relief works for shared ownership properties, please visit SDLTM29875+.

Current Purchase Price Thresholds (2022 – 2025)

During the period from 23 September 2022 to 31 March 2025, the SDLT thresholds for first-time buyers are:

• For homes costing £425,000 or less, there is no SDLT to pay.
• If the purchase price is more than £425,000 but not exceeding £625,000, buyers will pay 5% on the amount over £425,000.

For instance:

• If a first-time buyer purchases a home for £400,000, they will pay £0 in SDLT.
• If the home costs £500,000, the SDLT calculation would be 5% on £75,000 (the amount over £425,000), resulting in a payment of £3,750.

These thresholds were previously lower and will be adjusted back to that lower level on 1 April 2025.

Calculating SDLT

First-time buyers can use a calculator available on HMRC’s website to determine the SDLT they owe. You can find the calculator at HMRC Stamp Duty Calculator.

Legislative Framework

The rules regarding first-time buyers’ relief are outlined in the legislation found in Section 57B and Schedule 6ZA of the Finance Act 2003 (FA03).

Conditions for Claiming Relief

To qualify and claim this relief, certain conditions must be met:

• The buyer must be a first-time buyer, meaning they have never owned a property before (either in the UK or internationally).
• The property being purchased must be residential and will be the buyer’s only or main home.
• If purchasing through shared ownership, the buyer can either pay SDLT on the market value (full amount) or pay in stages using an approved scheme.

Making a Claim for Relief

First-time buyers can claim the relief when they submit their SDLT return to HMRC. This includes the following steps:

• When completing the SDLT return, the buyer should indicate that they are claiming first-time buyer’s relief. The relevant section will be present in the online form.
• It’s important to have all relevant information available, including the purchase price and details of how the property will be used.
• Buyers should keep a record of their claims as HMRC may ask for documentation to confirm eligibility in the future.

Additional Advice

It is recommended that first-time buyers consult with a solicitor or a tax advisor to ensure they fully understand their eligibility for this relief and to help navigate the SDLT return process.

Any changes in circumstances after the initial claim may affect the relief. Therefore, it is wise to stay informed and ensure compliance with the current regulations.