Being a ‘first-time buyer’ has significant benefits.
As a first-time buyer, your offer is not conditional upon the sale of a chain of other properties in order for you to proceed. In other words, by definition, you don’t have a property to sell. You’re also flexible in terms of your move, for the same reason. And there are financial benefits too, including qualification for participation in special First-time buyer ISA schemes, Help to Buy schemes and, perhaps most significantly, exemption for the requirement to pay stamp duty land tax (SDLT) in certain instances.
So, what is a first-time buyer?
The definition of a first-time buyer has been set out by the government in a guidance note published in 2018. It states the following;
“In order to count as a first time buyer, a purchaser must not;
- either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world.
- This includes previous acquisitions by inheritance or gift, or by a financial institution on behalf of a person under an alternative finance scheme.
- [SDLT] Relief is not denied by virtue of a previous acquisition as a trustee unless the purchaser was also a beneficiary of the trust.
- [SDLT] Relief is also not denied if the purchaser owns or has previously owned non-residential or mixed-use property, as long as that property did not include a dwelling. This restriction does not apply where the interest acquired was the grant or assignment of a lease with less than 21 years to run.
If the property is purchased jointly, all the purchasers must meet these conditions”.
Some lenders however, do offer their First Time Buyer schemes to purchasing couples when only one of the applicants meets the first time buyer criteria.
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