First Time Buyers Relief on SDLT – Tips and Traps

Over the past 20 years property prices have significantly and continually increased, often making it hard for first time buyers to get on the property ladder.

First Time Buyer Relief was introduced by the Chancellor on 22nd November 2017 aimed at helping people get onto the first step of that ladder by reducing their Stamp Duty Land Tax (SDLT) burden.

Here we explain a few things that you need to know if you want to take advantage of this benefit.

Who it’s for?

You must be a first time buyer. That means you have never previously bought, or had a major interest in a dwelling or land, anywhere in the world, even if by inheritance or gift. It also does not apply to an acquisition as a Trustee.

All purchasers must meet the conditions. If you are jointly buying a property, each of you must meet the first time buyer requirements.

The purchase must be for your main or only residence. This means the relief only applies to buying a single dwelling, with no linked transaction (except the purchase of a garden or grounds, or land that subsists for the dwelling, garden or grounds). It also does not apply to mixed use dwellings, such as a shop with a flat above.

Claiming the Relief

First time Buyer Relief is applicable on properties with a purchase price of up to £500,000. No SDLT is payable on the first £300,000 of the property price. For acquisitions over £300,000 and up to £500,000, SDLT is payable at 5% on the surplus over £300,000.

The effective date of the transaction is normally completion but can be earlier if the transaction has been substantially performed before that date. For example, the buyer taking possession or the vendor receiving 90% of the sale proceeds.

The relief must be claimed on a land transaction return using code 32 in the appropriate field of the return. Your accountant can help you with this.

Get first time buyer help

AJN helps small businesses with mortgage applications and tax planning related to first homes. Contact us for assistance with buying your first property.

AJN Accountants are specialists in helping contractors, freelancers and small businesses to save tax and time.

Please contact us for more information:

T: 020 3866 8951

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