HMRC SDLT: SDLTM29811 – Availability of the relief

Availability of the Relief

This section of the HMRC internal manual provides guidance on the availability of specific tax reliefs. It outlines the principles and conditions under which relief can be claimed, ensuring compliance with HMRC regulations.

• Defines eligibility criteria for tax relief.
• Explains the application process for claiming relief.
• Details necessary documentation and evidence required.
• Highlights common issues and errors in claims.
• Provides examples and case studies for better understanding.

Understanding First-Time Buyers’ Relief

The rules for claiming First-Time Buyers’ Relief are detailed in the Finance Act 2003 (FA03) Section 57B and Schedule 6ZA. This article explains the key points to help you understand if you qualify for this relief.

Who Can Claim This Relief?

The following conditions must be met to qualify for First-Time Buyers’ Relief:

• Single Dwelling Purchase: The relief applies when you buy a single residential property.
• Purchase Price Limit: The total amount paid for the property must not exceed £625,000.
• Individual Purchasers: The buyer, or buyers, must be individuals. This means that if there are multiple purchasers, each must be an individual person and not a company or any other type of organisation.
• First-Time Buyers: Each purchaser must be a first-time buyer. A first-time buyer is someone who has never owned a major property interest anywhere in the world. This includes properties obtained either independently or with others.
• Main Residence Requirement: The buyer must intend to use the property as their only or main home.
• Effective Date: The transaction’s effective date must be on or after 22 November 2017.
• No Linked Transactions: The purchase should not be linked to any other land purchases, except for land that is part of the garden or grounds of the property. This allows some flexibility, as you can include parts of the property’s garden or grounds.

Instances Where Relief Cannot Be Claimed

There are specific situations where you cannot claim First-Time Buyers’ Relief:

• Higher Rates Transactions: Relief is not available if your purchase is a higher rates transaction as defined in Schedule 4ZA of FA03. For more information, refer to SDLTM09730, which provides guidance on higher rates for additional dwellings.
• Non-Residential Land: You cannot claim relief if the property purchase involves any non-residential land. This means that if the property includes areas that are not classified as residential, such as commercial buildings or business land, then the relief does not apply.

Defining a First-Time Buyer

To qualify as a first-time buyer, you must never have previously owned a major interest in a dwelling or an equivalent interest in land anywhere in the world. This rule encompasses anyone who has had a share in a property, regardless of its location.

If you want more details on what counts as a first-time buyer, you can check SDLTM29845, which provides further insights into the definition of a first-time buyer in the context of this relief.

What is Considered a Dwelling?

To claim First-Time Buyers’ Relief, it’s essential to understand what is classified as a dwelling. A dwelling refers to a residential property that is suitable for living purposes, like a house or flat. For clarification on this, refer to SDLTM29851, which details the meaning of ‘dwelling’ in this context.

Useful article? You may find it helpful to read the original guidance here: HMRC SDLT: SDLTM29811 – Availability of the relief

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