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First Time Buyer Relief: Understanding Tax Credits and Deductions


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Purchasing your first home in the United Kingdom is an exciting step towards financial stability and long-term investment. As a first-time buyer, you may be eligible for certain tax credits and deductions that can help ease the financial burden.

In this article, we will explore the tax benefits available to first-time buyers in the UK and provide a better understanding of how they can help you save money.

Benefits for First Time Buyers

benefits of first time buyer

There are multiple tax credits and deductions available to first time buyers. You can claim these available benefits and ensure your experience of buying your first home is convenient and cost efficient.

1. Stamp Duty Land Tax (SDLT) Relief

One of the significant tax benefits for first-time buyers in the UK is the Stamp Duty Land Tax (SDLT) relief. SDLT is a tax levied on properties in England and Northern Ireland.

Under first time buyers relief, you are exempt from paying SDLT on the first £425,000 of a property’s value, as long as the property’s purchase price is £625,000 or less.

First-time buyers are given concessional rates of SDLT for UK and non-UK residents. The SDLT rates vary for UK residents and non-UK residents.

An extra 2% surcharge is added to all residential rates of SDLT for Non-UK Residents. The relief cannot be claimed if the purchase price is more than £625,000 & SDLT need to be paid at the standard rates on the total purchase price.


Tax Rate (UK Residents)

Tax Rate (Non-UK Residents)

0 to £425,000



£425,000 to £625,000



2. Help to Buy Equity Loan

Help to Buy Equity Loan scheme is designed to assist first-time buyers in purchasing a new-build home. Under this scheme, the government provides an equity loan of up to 20% (40% in London) of the property’s value, interest-free for the first five years. This equity loan reduces the amount of mortgage required and can make homeownership more affordable for first-time buyers.

3. Lifetime ISA (Individual Savings Account)

The Lifetime ISA is a tax-efficient savings account specifically for first-time buyers in the UK. With a Lifetime ISA, you can save up to £4,000 each year, and the government will contribute a 25% bonus on your savings, up to a maximum of £1,000 per year. The savings and bonus can be used towards the purchase of your first home, subject to certain conditions.

4. Help to Buy ISAs (Individual Savings Accounts)

Although the Help to Buy ISA scheme closed to new applicants in November 2019, those who already have Help to Buy ISAs can still benefit from the savings scheme.

 Help to Buy ISAs allowed first-time buyers to save up to £200 per month, and the government provided a 25% bonus (up to £3,000) when purchasing a property.

5. Principal Private Residence (PPR) relief

Principal Private Residence (PPR) relief is a tax relief available in the UK that can help homeowners reduce their capital gains tax (CGT) liability when selling their main residence. PPR relief is designed to ensure that individuals do not pay CGT on the profit made from selling their primary home.

If you decide to sell your first home in the future, you may be eligible for this relief.


As a first-time buyer in the UK, it’s important to be aware of the tax credits and deductions available to you. The SDLT relief, Help to Buy schemes, Lifetime ISA, Help to Buy ISAs (for existing account holders), and potential CGT relief can provide significant financial support throughout your home ownership journey. Get detailed information about first time buyers relief on A Complete Guide on First Time Buyer Relief.

It’s advisable to consult with a financial advisor or tax professional to understand the specific requirements, limitations, and eligibility criteria for each relief option. By taking advantage of these tax benefits, you can make the process of buying your first home in the UK more affordable and rewarding.

Ready to maximize your tax savings and experience the joy of homeownership?

Discover how First Time Buyer Relief can help you save big on SDLT with our expert team at UK Property Accountants.

We are dedicated to guiding you through the process and delivering the highest quality of service. Fill out our First Time Buyers Relief Assessment Form so that our accountants can reach you at their earliest.

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