What Tax Relief Options Are Available for First-Time Buyers?
People often ask what tax relief options are available for first-time buyers. If you’re buying your first home, the government has several ways to help people get onto the property ladder. In this guide, I explain different government schemes that are currently available.
Stamp Duty Tax Relief for First Time Buyers
First-time buyers don’t pay any Stamp Duty Tax Relief (SDLT) on the first £300,000 of a qualifying home. Above this threshold, you would pay 5% SDLT on the portion from £300,001 to £500,000 (there’s no relief above this amount).
To be eligible, you must be a genuine first-time buyer, and the property must be your only or main residence. SDLT relief is then claimed back by your solicitor after completion.
Under 40? Consider a Lifetime ISA
Until April 2028, under 40s can still apply for a Lifetime ISA (LISA). This is a type of individual savings account (ISA), which allows you to save up to £4,000 a year until you’re 50. The government adds a 25% bonus to your savings up to a maximum of £1,000 a year.
Your savings must be used towards buying a house or later life savings. LISAs are a useful way to help you save up for a house deposit, and everyone has a total savings limit of £20,000 across all ISAs. When you reach the age of 50, you can no longer pay in, but your account will stay open and will continue to earn interest.
First Homes Scheme
The First Homes scheme is only available in England and for purchasing a new-build home. It works by offering a 30-50% discount on the market value, making properties much more affordable for first-time buyers.
As the buyer, you own 100% of the property, but you must pass on the same percentage discount when you come to sell. This enables future first-time buyers to enjoy the same discount you’ve received. In some areas, the local council sets the eligibility criteria, giving preference to key workers or those on low incomes. So, you’ll need to check your eligibility.
Shared Ownership Houses
Shared Ownership homes are a way for first-time buyers to purchase a property when they cannot afford the whole deposit. It works by buying a “share” of the property, and you then pay rent to a landlord or property company on the remaining value. Typically, you would own between 10-75% of the home’s total market value.
Over time, you can usually buy more “shares” in the property, so you own more of your home and pay less rent. Known as “staircasing”, this can help people buy their home over many years. You’ll need to check if there’s additional ground rent or service charges to pay.
Getting a Mortgage for First-Time Buyers
It can be hard for first-time buyers to afford large cash deposits. Depending on your situation, you might be eligible for a 95% or 100% mortgage. Also, the Mortgage Guarantee Scheme ensures lenders keep low or zero deposit mortgages available for those with small deposits. You could also ask a family member to become a guarantor on certain mortgages.
For more information, see our Step-by-Step Guide for First-Time Buyers.
Buying your first home can seem stressful. As your trusted guide, you will receive clear and honest mortgage advice. I love helping first-time buyers, and I will guide you every step of the way, explaining the different forms of first-time buyer tax relief. I will then research the market across 90 lenders to find a suitable mortgage for you.
Are you a first-time buyer who needs trusted mortgage advice? Book a call today
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Sources:
https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
https://www.gov.uk/lifetime-isa
https://www.gov.uk/first-homes-scheme
https://www.gov.uk/shared-ownership-scheme
https://www.gov.uk/government/publications/2025-mortgage-guarantee-scheme
https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/government-schemes-help-buy-home/
https://www.gov.uk/government/publications/2025-mortgage-guarantee-scheme
