Wojciech
Diploma for Financial Advisers
Diploma in Accounting
Member of London Institute of Banking and Finance
Buying a home in the UK is a significant milestone, and it’s important to understand how stamp duty works before you finalize your purchase. Can you avoid stamp duty if one of you is a first time buyer is a common question, especially for couples or friends buying a home together. In this article, we’ll use simple words to explain how stamp duty relief applies when one person has owned property before and the other has not.
1. What Is Stamp Duty?
Stamp duty (also called Stamp Duty Land Tax, or SDLT) is a tax you pay when you buy a residential property in England or Northern Ireland. The amount of stamp duty you pay depends on the cost of the home and whether you qualify for any reliefs. First-time buyers typically get a discount if all buyers on the property are first-time buyers who have never owned a home before.
2. Rules for First-Time Buyer Relief
- All Buyers Must Be First-Time Buyers: If you’re purchasing a property with someone else, everyone involved must be a first-time buyer to get the relief. If even one person has owned property previously, the entire purchase usually won’t qualify for the first-time buyer discount.
- Property Price Limits: There’s a maximum price limit for getting the relief. This limit can change over time, so check the latest rules for the thresholds that apply.
Key point: If one person has owned property in the past—even if it was outside the UK—the purchase typically does not qualify for first-time buyer relief.
3. Why This Matters
Being aware of these rules can help you budget properly. You might see headlines or articles that suggest you can get a partial discount if at least one buyer is new to the housing market, but in practice, the UK government usually requires all buyers to be first-time buyers. This restriction prevents one person’s previous ownership from spoiling the relief for everyone else.
4. Possible Alternatives
- Sole Purchase: In some cases, people choose to put the property in the name of the one person who is a first-time buyer. However, this is a significant legal decision, and it’s important to speak with a mortgage advisor or solicitor to understand the full implications, such as mortgage eligibility and property rights.
- Shared Ownership: Some government schemes (like shared ownership) might offer a different path to lower costs, but again, the first-time buyer rules often still require that all co-owners are first-time buyers.
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Final Thoughts
If you’re planning to buy a home with another person, it’s crucial to check whether everyone is a genuine first-time buyer. Can you avoid stamp duty if one of you is a first time buyer? In most cases, the answer is no because all parties named on the mortgage and property deeds must be first-time buyers to qualify for the relief. By knowing these rules, you’ll be better prepared to handle your home purchase and budget for any stamp duty that may apply.
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