First time buyer relief and its application

23rd November 2017

In the November 2017 Autumn Budget, the Chancellor of the Exchequer announced a permanent relief from Stamp Duty Land Tax (SDLT) for first time buyers, effective from 22 November 2017

The first time buyer’s relief may apply to individuals purchasing a residential property for the first time within England, Wales and Northern Ireland (see below).

A first time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the United Kingdom or anywhere else in the world and who intends to occupy the property as their main residence.

The first time buyer’s relief will apply where:-

  • there is a purchase of a single dwelling,
  • the purchase price does not exceed £500,000,
  • the purchaser (buyer) or, if there is more than one, all the purchasers are individuals,
  • the purchaser (buyer) or, if there is more than one, all the purchasers are first time buyers who intend to occupy the dwelling as their only or main residence,
  • the purchase is not linked to any other land transactions, except for –
    • land that is or forms part of the gardens or grounds of the dwelling, or
    • land that subsists for the benefit of either the dwelling or its garden and grounds. 
  • the effective date of the transaction is on or after 22 November 2017.

Where first time buyer’s relief is available the rates of SDLT applicable are:-

  • 0% on the first £300,000 of the purchase price, and
  • 5% on the amount above £300,000.

The relief must be claimed by filing a Stamp Duty Land Tax return and is claimed using reason code 32 in question 9 of the SDLT return.

First time buyers purchasing a dwelling for more than £500,000 will not be entitled to any relief and will pay SDLT at the normal rates.

First time buyer relief will apply to all transactions with an effective date on or after 22 November 2017, including any that completed on 22 November 2017 before the Chancellor’s announcement. Anyone who is eligible to claim the relief but submitted their return and/or paid based on the standard rates of SDLT will be able to claim a refund.

Conveyancers may use the new First Time Buyers declaration form for client's to sign to declare eligibility for the relief. 

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