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HMRC SDLT: First-Time Buyers Relief: Conditions for Main Residence Occupancy Explained

Conditions for Claiming Relief for First-Time Buyers

Overview of Relief

Relief is an important benefit available to first-time buyers when purchasing their first home. This support is specifically designed for those intending to make the property their only or main residence.

Eligibility for Relief

To qualify for this relief, certain conditions must be met:

– Purchasers must be first-time buyers: All buyers involved in the property transaction must be classified as first-time buyers.
– Individuals only: Only individual buyers can claim this relief. If any of the purchasers is a company, they cannot receive this relief, as companies do not qualify as individuals.
– Intention to occupyUnderstanding First-Time Buyers

When we say ‘first-time buyer,’ it is crucial to understand what this term means. For a detailed explanation of who qualifies, you can refer to SDLTM29845.

Occupying the Dwelling

Another requirement for relief is that all buyers must genuinely intend to occupy the purchased house as their primary residence.

– If an individual currently lives in only one dwelling, that will certainly be considered their main residence.
– In some situations, a first-time buyer may continue living in another property after buying a new home.

Example: Consider a first-time buyer who has purchased a home but continues to rent another house. They might plan to move into their newly bought property after carrying out some renovations. The fact that they still reside in their rented accommodation does not automatically disqualify them from receiving relief, as long as they clearly intend to occupy the purchased home as their main residence.

Evaluating Intentions

When assessing whether a buyer’s intentions meet the requirements for relief, all relevant facts and circumstances need to be taken into account. Here are some points to consider:

– Immediate Occupation Not Required: It is not mandatory for the purchaser to move into the property right after completing the purchase. What matters is that at the time of the transaction, there is a solid intention to make the purchased residence their primary home.
– Unforeseen Circumstances: Even if circumstances make it challenging or impossible for the buyer to occupy the property immediately after the purchase, this does not prevent relief from being granted. The intent to occupy the property is key.

Examples and Scenarios

To illustrate the points made above, let us go through a couple of examples:

Example 1: John and Sarah are both first-time buyers. They buy a flat intending to live there as their only home. They are eligible for relief.

Example 2: Lucy is a first-time buyer who purchases a house but continues living in her rented apartment because she plans to renovate the new house first. Since her intention is to make the new house her main residence, she can still claim the relief.

Example 3: If a company buys a property, none of the individuals involved in that transaction will qualify for relief simply because corporations cannot claim it.

Key Takeaways for Buyers

When considering buying your first home, keep these crucial aspects in mind to ensure you can claim the desired relief:

– Confirm all purchasers are first-time buyers.
– Ensure that all buyers have a clear intention to reside in the property as their primary home.
– Understand that it is acceptable to have circumstances preventing immediate occupation as long as the intent to live in the new home exists.

For more details on this relief, individuals can refer to the official information provided on the HMRC site, which covers various topics related to home buying and tax relief.