First-time buyer definition: Who qualifies and who doesn’t?

Under government relief first announced in 2017, first-time buyers pay no stamp duty on purchases up to £300,000 and a rate of 5% on portions between £300,001 and £500,000.

This 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

You can find free expert support from brokers/advisers online. Services like Habito or L&C can help you estimate your budget, find the best rates available to you from across the market, and generally navigate the whole process!

As a first-time buyer, you may also be able to leverage government schemes (like the First Homes Scheme). Again, a good broker can help you explore these options.

Who is most likely to be researching first-time buyer definitions?

Finder data suggests that men aged 25-34 are most likely to be researching this topic.

Written by

Matthew Boyle

Publisher

Matthew Boyle is a banking and mortgages publisher at Finder. He has a 7-year history of publishing helpful guides to assist consumers in making better decisions. In his spare time, you will find him walking in the Norfolk countryside admiring the local wildlife. See full bio

Matthew's expertise

Matthew has written 221 Finder guides across topics including:

• Helping first-time buyers apply for a mortgage
• Comparing bank accounts and highlighting useful features
• Publishing easy-to-understand guides