SDLTM29845 | Definition of a first-time buyer FA03/SCH6ZA/PARA6

In order to count as a first-time buyer, a purchaser must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world, regardless of the value of that interest.

This includes previous acquisitions by inheritance or gift, or by a financial institution on behalf of a person under an alternative finance scheme.

This restriction does not apply where the interest acquired was the grant or assignment of a lease with less than 21 years to run.

If the property is purchased jointly, all the purchasers must meet these conditions.

In a situation where a person ‘A’ purchases a part share of a property from a person ‘B’ so that they now jointly own the property, FTB relief cannot apply because legally both A and B are purchasers, meaning that all of the purchasers are not ‘first-time buyers’.

Where only one party to a marriage / civil partnership is purchasing the dwelling, it is not necessary to consider whether the non-purchasing spouse / civil partner has previously owned a relevant interest in a dwelling to work out eligibility, unlike when considering whether the higher rates apply (see SDLTM09730+).

Relief is not denied if the purchaser owns or has previously owned non-residential property or mixed residential / non-residential property, as long as that property did not include a dwelling. Where non-residential property was purchased but a dwelling was later constructed or a building was adapted for use as a dwelling, this would not preclude the purchaser from being treated as a first time buyer.

The previous acquisition of mixed property which included a major interest in a dwelling would mean the purchaser would not count as a first-time buyer.

The previous acquisition of a part share in a dwelling would mean the purchaser would not count as a first-time buyer.

See SDLTM29855 – SDLTM29861 regarding the effect of a previous acquisition by a trust or settlement on whether a purchaser is a first-time buyer.