Purchasing your first home in the UK can be both exciting and overwhelming. Between arranging mortgages, finding the right property, and managing legal requirements, it’s easy to overlook the potential savings available through first-time buyer relief. This relief can significantly reduce your Stamp Duty Land Tax (SDLT) bill, but only if you understand the process and follow the correct steps.
Step 1: Check Your Eligibility
The first step to claiming first-time buyer relief is confirming that you meet HMRC’s eligibility criteria. You qualify if:
- You (and anyone else buying the property) have never owned a property in the UK or abroad
- The property purchase is intended as your main residence
- The purchase price does not exceed the specified threshold for relief (£425,000 for full relief, with partial relief up to £625,000 as of the current SDLT rules)
Ensuring your eligibility before completing the purchase is critical, as HMRC will not provide relief retroactively if the criteria are not met.
Step 2: Complete the SDLT Return Correctly
Once you have confirmed eligibility, the next step is completing your SDLT return. While some buyers rely on solicitors to handle this, it’s important to ensure that first-time buyer relief is explicitly claimed on the return.
Your SDLT return should include:
- Details of all buyers
- Property purchase price
- Confirmation that the property is your main residence
- Declaration of eligibility for first-time buyer relief
Errors or omissions at this stage can delay the relief or result in HMRC rejecting your claim.
Step 3: Submit the SDLT Return and Payment
After completing the SDLT return, submit it to HMRC along with any payment due. If your purchase price is below the relief threshold, you may not need to pay any SDLT at all. For partial relief, only the applicable portion of the SDLT will be due.
Using this step wisely ensures that your first-time buyer relief is applied immediately, preventing overpayment.
Step 4: Keep Records and Documentation
HMRC may request proof that you are eligible for first-time buyer relief, particularly for larger transactions. Keep records such as:
- Identity verification documents
- Previous property ownership declarations
- Mortgage agreements
- Solicitor confirmations
Having accurate records avoids complications and ensures that your claim is processed smoothly.
Step 5: Review and Plan for Future Property Purchases
Once your SDLT return is processed and first-time buyer relief applied, it’s worth reviewing your finances and planning ahead. The savings from this relief can be reinvested into your property, used to cover moving costs, or saved for future purchases. Proper planning ensures you maximise the benefit from this important relief.
Also Read: Stamp Duty for Limited Companies
Conclusion
Claiming first-time buyer relief in the UK doesn’t have to be complicated. By following these five steps — checking eligibility, completing the SDLT return correctly, submitting payment, keeping proper documentation, and planning for future property purchases — you can ensure the relief is applied correctly and save a significant amount on your first home.
