Guide to First-Time Buyer Relief (FTB Relief)

Buying your first home is one of life’s biggest milestones — but it also comes with its fair share of costs. One of the largest upfront expenses is Stamp Duty Land Tax (SDLT), a tax charged when you buy property or land in England or Northern Ireland.

Fortunately, if you’re a first-time buyer, you may qualify for First-Time Buyer Relief (FTB Relief) — a valuable exemption that could save you thousands. This guide explains what FTB Relief is, who qualifies, how it’s calculated, and how to claim it through your SDLT return.

What Is First-Time Buyer Relief?

First-Time Buyer Relief is a Stamp Duty Land Tax reduction introduced in the Autumn Budget 2017, effective from 22 November 2017.

It was designed to help first-time buyers get onto the property ladder by reducing or removing the amount of SDLT payable on a qualifying purchase.

• The relief applies only to residential properties purchased in England and Northern Ireland.
• For properties in Scotland, SDLT is replaced by Land and Buildings Transaction Tax (LBTT), and in Wales, by Land Transaction Tax (LTT).
• The rules for first-time buyer relief differ in those regions.

In short:

If you’ve never owned a home before and are buying a residential property for £500,000 or less, you may be eligible for this relief.

Who Qualifies for First-Time Buyer Relief?

To qualify for First-Time Buyer Relief, you must meet all of the following criteria:

You must be an individual

The relief is not available to companies, partnerships, or trusts. All purchasers on the property deed must be individuals and first-time buyers.

Example:  If you buy a property jointly with your limited company, you cannot claim relief — even if you personally are a first-time buyer.

You must never have owned property before

You (and any joint buyers) must never have held a freehold or leasehold interest in a residential property anywhere in the world. That includes property acquired through purchase, gift, or inheritance.

Example:  If you inherited a 25% share in a house years ago, you’ve technically owned property before — so you’re not eligible.

You must be buying a single dwelling

Relief applies only when purchasing one dwelling.  If your transaction involves multiple dwellings, such as two flats in the same building, the relief will not apply.

A “dwelling” must be self-contained, with independent access, cooking, and washing facilities.

The purchase price must be £500,000 or less

• If the price is £500,000 or under, you can claim relief.
• If it exceeds £500,000, the entire transaction is charged at the standard SDLT rates — not just the portion above the threshold.

Example:

• £475,000 property → relief available.
• £510,000 property → full SDLT applies, no relief.

You must intend to live there as your main residence

You must intend to occupy the property as your only or main home.  You don’t have to move in immediately after completion, but there must be a genuine intention to live there.

Relief is not available for buy-to-let or purely investment purchases.

Example:  If you plan to rent out your new home, even temporarily, you cannot claim First-Time Buyer Relief.

The property must be residential

The relief only applies to residential property, including houses, flats, and associated gardens or grounds.
It does not apply to commercial or mixed-use properties (for example, a shop with a flat above).

It must not be a linked transaction

A linked transaction occurs when multiple property purchases are connected or made between the same parties as part of a single deal.  If the total value of linked transactions exceeds £500,000, relief cannot be claimed.

However, exceptions exist — such as purchasing the garden or parking space linked to your main property — provided the total value stays under £500,000.

SDLT Rates for First-Time Buyers (2025)

First-time buyers benefit from lower SDLT rates than standard purchasers. The rates depend on whether you are a UK resident or a non-UK resident.

Example for a UK Resident:

For a property costing £475,000:

• 0% on the first £300,000
• 5% on the remaining £175,000 → £8,750 total SDLT

Example for a Non-UK Resident:

For a property costing £475,000:

• 2% on the first £300,000 → £6,000
• 7% on the remaining £175,000 → £12,250
• Total SDLT: £18,250

Non-UK residents pay 2% more on each band due to the foreign buyer surcharge introduced in 2021.

How to Claim First-Time Buyer Relief

Claiming the relief is straightforward and usually handled by your solicitor or conveyancer during completion.

Steps to claim:

1. Confirm you meet all eligibility conditions.
2. Complete the Stamp Duty Land Tax Return (SDLT1).
3. Enter relief code “32” in the reliefs field of the form.
4. Submit your return and pay any tax due within 14 days of the transaction’s effective date.

The buyer is legally responsible for ensuring the return is filed correctly, even if handled by a solicitor.

Penalties for Late Filing or Payment

HMRC imposes strict penalties for missing the 14-day deadline:

• £100 if submitted within 3 months of the due date.
• £200 if more than 3 months late.
• Up to 100% of the tax due if over 12 months late.
• Daily penalties (up to £60 per day) may also apply after a tribunal order.

Interest accrues on unpaid SDLT until full payment is made.  You can appeal penalties within 30 days of receiving a formal notice if you have valid grounds.

Common First-Time Buyer Scenarios Explained

If one buyer isn’t a first-time buyer

If you’re buying jointly, both buyers must qualify.  If one has previously owned property, no relief can be claimed — even if the other has never owned a home.

Buy-to-Let purchases

You cannot claim FTB Relief on a property bought purely to rent out.  However, you can still let out spare rooms in your main residence without affecting eligibility.

Shared Ownership properties

First-time buyers purchasing through a shared ownership scheme can claim relief if the total market value is £500,000 or less.  You may elect to pay SDLT in full upfront or in stages (known as a market value election).

Mixed-use properties

If your property includes a commercial element (e.g. shop and flat), relief doesn’t apply.
Mixed-use purchases fall under non-residential SDLT rates.

Married couples and civil partners

HMRC treats couples as one buyer for SDLT purposes. If either spouse or partner has previously owned property, the pair cannot claim FTB Relief.

Transfers and inherited property

Relief only applies to property purchases.  If you receive a property as a gift or inheritance, SDLT and FTB Relief do not apply because there’s no chargeable consideration.

Will I lose FTB relief if I own shares in a limited company that owns residential property?

A limited company is a separate legal entity, and under Schedule 6ZA of the Finance Act 2003, an individual qualifies for First-Time Buyers’ Relief provided they have not previously held a major interest in a dwelling. Being a director or shareholder of a limited company should not therefore  affect your eligibility to claim First-Time Buyers’ Relief.

Stamp Duty Relief for First-Time Buyers in London

Many first-time buyers in London struggle to qualify for relief due to higher property prices.

However, opportunities still exist in boroughs with average prices below the £500,000 threshold.

Example:

• £475,000 flat in Croydon → qualifies for full relief.
• £550,000 flat in Camden → exceeds threshold; full SDLT applies.

For higher-value areas, exploring shared ownership or help-to-buy schemes may provide access to relief.

When First-Time Buyer Relief Does Not Apply

You cannot claim the relief if:

• The property costs more than £500,000
• The buyer has ever owned property before (including abroad)
• The purchase is made through a company
• The property is buy-to-let or mixed-use
• It forms part of a linked or multi-dwelling transaction
• One joint buyer isn’t a first-time buyer

Stamp Duty FAQs for First-Time Buyers

Do first-time buyers pay Stamp Duty in the UK?
Not if the property costs £425,000 or less. Between £425,001–£625,000, you’ll pay 5% on the amount above £425,000.

Can first-time buyers get a Stamp Duty exemption in 2025?
Yes, the exemption still applies in England and Northern Ireland under the current SDLT thresholds.

How much Stamp Duty does a first-time buyer pay on a £500,000 property?
If eligible, you’ll pay £10,000 — 0% on the first £300,000 and 5% on the remaining £200,000.

Can I claim FTB Relief if I’m buying with a partner who already owns property?
No, both buyers must be first-time buyers to qualify.

Does FTB Relief apply to buy-to-let?
No, the property must be intended as your main residence.

How UK Landlord Tax Can Help

The First-Time Buyer Relief scheme offers significant savings, but navigating the rules can be complex — particularly if you’re buying jointly, purchasing through a shared ownership scheme, or are a non-UK resident.

At UK Landlord Tax, our specialist accountants can:

• Review your eligibility for SDLT relief
• Ensure your HMRC return is completed correctly
• Advise on property ownership structure (individual vs company)
• Plan for long-term tax efficiency as your portfolio grows

Buying your first home is exciting — but it should also be financially smart.

Speak to one of our property tax experts today for tailored advice on your SDLT position and future investment strategy.  Contact us today or complete our online form to get started.

Thandi Nicholls Ltd
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Wolverhampton
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