First-time buyer definition: Who qualifies and who doesn't? | Finder UK (2024)

In November 2017, the government announced stamp duty relief for all first-time buyers in the UK.

Under this relief, first-time buyers will pay no stamp duty on purchases up to £300,000 and a rate of 5% on portions between £300,001 and £500,000.

This new relief makes it important to understand who the UK government defines as a first-time buyer.

In laymans terms, the definition of a first-time buyer is an individual who has never owned a property before. To put it another way someone getting a mortgage who isn’t a homeowner, homemover, buy-to-let investor or just remortgaging is classed as a first-time buyer. However, there are a few nuances which make it a bit more complicated than that.

Instances where you’ll commonly be accepted as a first-time buyer

• If you’ve never owned a property before and you’re applying for a mortgage alone. You’re a bonafide first-time buyer in this situation. There are no sneaky rules or loopholes to worry about.
• If you’ve owned a commercial property, but never owned a residential property. First-time buyer status only applies to residential properties, so if you’ve owned a shop or a pub, you could still qualify for stamp duty relief. However, if your commercial property had a residential element (and was therefore defined as a semi-commercial property), you won’t qualify.
• If you apply for a joint mortgage and none of you has previously owned residential property. Your stamp duty bill will be reduced in this situation too.

Instances where you’ll commonly not be accepted as a first-time buyer

• If you’ve previously owned a property and sold it. To qualify, you need to have never owned a property.
• If you inherited a property or were added to the deeds. First-time buyer status is based on ownership of residential property, not whether you bought it.
• If you’ve previously owned a buy-to-let property. If you’ve previously owned a buy-to-let property, you no longer qualify as a first-time buyer.
• If you part-owned a property in the past. If you previously had a shared ownership mortgage or a joint mortgage, you’ll no longer qualify as a first-time buyer.
• If you owned a residential property overseas. Overseas properties still count when it comes to first-time buyer status.
• If your co-owner has owned a residential property. With joint mortgages, all applicants have to be first-time buyers in order to qualify for stamp duty relief.
• If your spouse has owned a residential property. Spouses count as a single buyer in property law. If your spouse isn’t a first-time buyer, you’re not either, even if you’re applying to buy a property in your own name.

What to do if you qualify as a first-time buyer

If you qualify as a first-time buyer, this means you’ll be able to access some of the cheaper mortgage deals on the market. You can compare mortgages and browse rates here.