The First Time Buyers Initiate aims at making affordable homes available to first-time buyers who might be out priced of the housing market.
It was introduced as part of government’s Home Buy low-cost home ownership initiative to bring some relief to the buyers. Accordingly, first time buyers with certain eligibility criteria can purchase a house for 30% to 50% less than their market value.
Understanding First Time Buyer
First Time Buyer, means an individual who has not previously been a purchaser in relation to a land transaction the main subject matter of which was a major interest in a dwelling; and who, has not previously acquired, an equivalent interest in a dwelling situated in a country or territory outside England, Wales and Northern Ireland, or an interest in an estate in fee simple absolute, or a term of years absolute.
First time buyers must be 18 years or older, be a first-time buyer, and able to obtain mortgage for at least half the price of the home.
Transaction do not count as being the main subject matter of transaction if it is a term of years absolute which has less than 21 years to run at the beginning of the day after effective date of transaction.
First Time Buyer’s Relief
In case of joint purchasers both must be first time buyers of a residential property. The relief is available if,
- One intends to occupy the property as one’s own residence.
- The purchase price is no more than £625,000.
First Home Buyers pay 0% Stamp Duty Land Tax on the first £425,000 and 5% on the remainder amount till £625,000.
If in case the price of the property is more than £625,000 one cannot claim relief and the purchase will be applicable for normal rates of SDLT for the said property.
Stamp Duty Rates
Stamp Duty Land Tax is applicable for all home purchasers in the United Kingdom. If the price of the home is below the SDLT threshold of £250,000 no SDLT is applicable, if price is above the threshold, the higher the price, the higher the applicable SDLT.
|
Property Price |
SDLT Rate |
|---|---|
|
Up to £250,000 |
0% |
|
Next £625,000 |
5% |
|
Next £575,000 |
10% |
|
Portion above £1.5 million |
12% |
Stamp Duty Rates for First Home Buyers
|
Property Price |
SDLT Rate |
|---|---|
|
Up to £425,000(FHB threshold) |
0% |
|
Next £200,000(£425,000-£625,000) |
5% |
|
£625,000 |
No Relief Available |
To better understand how these rates apply to your situation, check out our comprehensive First Time Buyer’s Relief Guide.
Conclusion
Understanding these eligibility criteria and how they apply to your situation can be complex. To simplify this, we've created an Assessment Form that can help you determine if you qualify for the First Time Buyers Relief.
Fill out our Assessment Form to get a personalized evaluation of your eligibility and potential savings
