HMRC – first-time buyer’s relief

SDLT has become increasingly complex, but it is still up to practitioners to ensure that SDLT is properly calculated and that any reliefs are properly applied. It is of note therefore that on 30 July 2024, HMRC updated the SDLT manual in relation to first-time buyer relief (SDLTM29800 – Reliefs: First Time Buyers). It will surprise no one to learn that the manual is detailed. The introductory paragraph is as follows (note the change due on 1 April 2025):

‘SDLTM29805 – Introduction to First-Time Buyers’ relief

Relief from SDLT is available for certain acquisitions of residential property by first-time buyers:

• Between the 23 September 2022 and 31 March 2025 the relief applies to purchases of residential property for £625,000 or less, provided the purchaser intends to occupy the property as their only or main residence.

• The relief applied from 22 November 2017 to 22 September 2022 for purchases of residential property costing £500,000 or less. The threshold is due to return to £500,000 on 01 April 2025.

Purchasers of shared ownership property who elect to pay SDLT on the market value of the property have been eligible for the relief since its introduction.

From 29 October 2018 the relief was extended to include first-time buyers purchasing through approved shared ownership schemes who do not elect to pay SDLT on the market value of the property but instead pay SDLT in stages. That extension applied retrospectively from 22 November 2017 onwards.

Further details on how first-time buyers’ relief applies to purchases of shared ownership property can be found at SDLTM29875.

Between the 23 September 2022 and 31 March 2025 first-time buyers purchasing their first home for £425,000 or less will pay no SDLT. Where the purchase price is over £425,000 but does not exceed £625,000 they will pay 5% on the amount above £425,000. Thresholds were previously lower and are due to return to those lower levels on 01 April 2025.

A calculator is available on HMRC’s website (www.tax.service.gov.uk/calculate-stamp-duty-land-tax) which calculates the SDLT due for first-time buyers who are eligible to claim the relief.

The legislation covering first-time buyers’ relief can be found in Section 57B and Schedule 6ZA to Finance Act 2003 (FA03).

This guidance provides further details about the relief, including the conditions that must be met before the relief can be claimed and how to claim the relief.’

Link: www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm29800.

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