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The big news from last week’s Budget was a reduction in Stamp Duty for first-time buyers in England, Wales and Northern Ireland. So here, we attempt to answer your questions about first-time buyers and Stamp Duty.

Stamp Duty for first-time buyers – your questions answered

The big news from last week’s Budget was a reduction in Stamp Duty for first-time buyers in England, Wales and Northern Ireland. Understandably, there have been a lot of questions and many of you have been calling the Money Advice Service to find out what this means for you.

So here, we attempt to answer your questions about first-time buyers and Stamp Duty.

What are the changes to Stamp Duty?

First-time buyers will no longer pay Stamp Duty on properties worth up to £300,000.

If the property is worth between £300,000 and £500,000, you will pay no Stamp Duty on the first £300,000, but will pay the standard 5% on the remaining amount.

For example, if the property is worth £450,000, you will pay no Stamp Duty on the first £300,000 and 5% on the remaining £150,000.

Under the old system, first-time buyers would pay £12,500 in Stamp Duty on this £450,000 property. The new system means they will pay just £7,500. 

What is a first-time buyer?

To be classified as a first-time buyer you must never have owned a residential property in the UK or abroad. This includes freeholds and interests in leaseholds.

You must also be purchasing your only or main residence. This means first-time buyers cannot get Stamp Duty relief on buy-to-let properties.

I’m buying my house after 22 November, will I have to pay Stamp Duty?

Stamp Duty is applied after completion of a sale. So, if you qualify as a first-time buyer, the property is under £500,00 and the deal was finished on or after 22 November, you will benefit from these changes to Stamp Duty.

This includes reserves on new build properties, where you have agreed to buy the property, but the deal has yet to be completed.

I bought my house before 22 November, can I get my Stamp Duty back?

Probably not. If the deal was completed before 22 November, you will have to pay normal rates of Stamp Duty.

However, sometimes people transfer the money for Stamp Duty to their solicitor’s holding account so it can be transferred on completion. In this case, you should be able to get back what you overpaid.

I inherited a house, am I a first-time-buyer?

No. Being a first-time buyer is about ownership, not buying. As you own the house you inherited, you are no longer a first-time buyer.

I was named on the deeds to my parents’ house, am I a first-time-buyer?

Like inheriting a house, being named on the deeds makes you an owner, so you are no longer a first-time buyer.

I’m buying a house with my partner. One of us is a first-time buyer, the other is not. Can we still get Stamp Duty relief?

If you’re married and jointly buying a property, then you both need to be first-time buyers to get Stamp Duty relief.

Unmarried people can still get a reduction in Stamp Duty, if the only person named on the mortgage deed is a first-time buyer.

But, there are a couple of things you need to be aware of:

First, the maximum saving on a property purchase is still £5,000 regardless of the number of names on the mortgage deed.

If the mortgage application is only in one name, it will be based on that person’s income alone, which might impact how much your lender is prepared to lend you.

Second, you need to think about what would happen if you split up. If the property is in both names, you will both have a claim. If the property is only in one name, then it’s possible you or your partner could be left with nothing legally. 

Can I get Stamp Duty relief if I’m purchasing a buy-to-let property?

No. To be a first-time buyer you must be purchasing a property you intend to live in. However, you can still sub-let a spare room and get Stamp Duty relief as long as you intend on living in the property.  

What do you think?

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  • Geoff Hamilton / 21 June

    My son and his partner want to purchase a property approx cost £130k they have tried to obtain a mortgage but have failed to do so due to various debt issues. I am wanting to help them and started looking at the option of me purchasing the property via a mortgage. I currently have a Main residence which I own jointly with my wife we do not have a mortgage on this property. I also have a buy to let mortgage on property this is worth approx £70k. Will I have to pay 3% stamp duty on the property that is bought on my son and his partners behalf ?, if so is their a straightforward way around this ?

  • Jim / 13 June

    If we are two first time buyers buying a house over £500,000 does the limit go up or does it stay at £500,000 as there is two of us?

  • Steven Lack / 9 June

    If two friends buy a property - not a couple, just friends - and both are first time buyers, will their Stamp Duty exemption apply to each? In other words, would they be able to purchase up to £600,000 before SD kicks in?

  • Kyle Williams / 6 June

    If i owned a property which was sold to no profit, and am purchasing a new build 6 months later, do i qualify as a FTB

  • Fenny / 31 May

    Hi,
    An elderly relative recently passed away and left their estate to my mother and uncle. Unfortunately my mother passed away some years ago, so 50% of the inheritance/estate passes to me by default. This includes the family home.

    At time of writing I'm in search of a property in a completely different area and both I and my partner have Help to Buy ISAs to this end.

    I have absolutely no intention of living in the house to which I will be a 50% beneficiary of. My uncle is nominated executor of the will.

    There are no signs that the inherited property is likely to be sold or rented any time soon.

    My question: By being a named beneficiary, will this now render all of the help to buy ISA saving void for the purposes of the government bonus? And will I also no longer receive FTB stamp duty relief?

    It seems like a repugnant outcome for something that I have no control over if so (ie, I am financially hindered in my first home purchase rather than helped).

  • Jun Qian / 27 May

    Dear Sir/Madam,
    I am going to buy a freehold house, I am first time buyer and I only named on the mortgage deed. my wife own a house, do I need pay for the high stamp duty land tax? or just pay the stamp duty as a first time buyer.
    Kind regards

  • Kathy Y. Evans / 16 May

    If my son is the owner of a new flat and he is a first time buyer, the one to live in is his sister as my son is on overseas work in the coming 3 years. Is my son possible to get the stamp duty relief?

  • ryan / 15 May

    I own 2 properties and would like to buy another with a friend who is a first time buyer, what would be the stamp duty for myself/both? He would live in it and rent out the spare room. The property would be roughly £700k, thanks.

  • Alex P / 2 May

    I was gifted a non-residential property (used as an office) in Greece by my parents a few years ago.

    My wife and I are now looking to buy a flat in England, which where we have been living for the last few years, as our main residence.

    About the definition of a first-time buyer (FTB), some sources say that an FTB is someone that has never owned a property, some other sources say that is someone that has never onwed a non-residential property, while the HMRC FTB guide say that it is someone that has never owned a dwelling, which it defines as a building or part of a building that is used or can be used as residence.

    In your opinion, does owning this office in Greece mean that we cannon be FTB's?

    Many thanks,

    Alex

  • Andrew / 11 April

    My wife died nine years ago and left a share of our property to my son in her will. He has no right to live in our house until I die and he has not resided with me since leaving university five years ago. He does not benefit from the property in any way. Does he have what HMCR term 'an interest' in my property? It seems sensible to assume that if he cannot make use of the property until I die, he does not have 'an interest', but as we all know, to assume is to make an ass out of u and me. Incidentally I contacted HMCR to try to get an answer to my question, but they were only able to advise me that if he has an interest in another property, then he does not qualify as a first time buyer. I do hope you will be able to help.

  • Angela Mackenzie / 20 February

    I’m divorcing and buying a property for myself once the joint property has been sold, will I be categorised as a first time buyer.

  • Emma / 31 January

    I’m buying a house with my partner. One of us is a first-time buyer, the other is not. Can we still get Stamp Duty relief? What if we choose "tenants in common" rather than " joint tenants" on the mortgage. Will my partner get stamp duty first time buyer exemption?

  • david / 29 January

    I bought a flat before getting married- and then I moved into a rented property with my wife. and let out my flat as a buy to let (still in my name).
    My wife is looking to buy a house and we are wondering if it is in her name do we pay stamp duty. (could I be a guarantee on the mortgage) or do we have to buy it together and pay second home tax and stamp duty?

  • Chang Huang / 18 January

    My son is in his final year university. He is the first time buyer. We plan to remortage our own house to release enough fund plus some savings so that he can pay a full cash payment for his first flat (via a solicitor , gifted to my son).
    My question is - Can he rent the flat out after the completion for 1-2 years and then he moves in after the university study and starts working? What is the criteria of "intend to live " in the policy statement. Thank you!

    ---

    We would advice checking with a mortgage provider or a solicitor about this. However, what we can say is to benefit from the Stamp Duty relief, your son would have to live in the property, i.e. you can't buy-to-let and get Stamp Duty relief. But, if you live in the property, you are allowed to sub-let. Hope this helps.

  • Barry Scott / 14 January

    I currently own a property with my brother. We have agreed to remove his name and add my partners name. My partner is a first time buyer and the mortgage amount would be 194k. Do we pay any stamp duty and if so how much?

  • Alan Gomez / 9 January

    I have two sons who are both over 21, and now want to get on the property ladder as first time buyers and want to consider taking advantage of the current Stamp Duty exemption on the first 300K band. However the majority of the funds they have available come from a will which was left by their grandmother over 20 years ago and as they were under the age of 18 at that time, the family solicitor was requested to set up a trust to which probate was granted to him and her son-(myself/father to both boys) acting as Trustees and according to the deceased´s Will that the whole of her estate including a property be passed in trust to her grandchildren in equal shares on their attaining the age of eighteen.

    At the time of the Grant both boys- (grandsons) were under eighteen years, the property remained registered in the name of the deceased until transferred by the Trustees in a sale completed just recently- (December 2017). The boys have never owned a property here/or abroad and we just need clarification to see if they can be considered for first-time buyer status? Please let us know as this appears to be a bit of a grey area.

    Many thanks in anticipation and we look forward to your reply and advice.
    AlanG

  • Jane Dakin / 19 December 2017

    My Husband and I have not owned a property or had a mortgage for more than 15 years, we are now buying a new property with a new mortgage, are we classed as first time buyers?

    ----

    I'm afraid you're not classed as a first-time buyer. If you have ever bought, inherited or been on the title deeds of a house before you're not a first-time buyer,