AB17: SDLT Relief for First-time Buyers - KPMG United Kingdom
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Autumn Budget 2017: SDLT Relief for First-time Buyers

AB17: SDLT Relief for First-time Buyers

A permanent SDLT relief has been introduced for first time buyers, effectively increasing the nil-rate threshold to £300,000, for purchases up to £500,000.


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In a bid to help more first-time buyers onto the housing ladder (over a million in the next five years), the Chancellor has introduced a stamp duty land tax (SDLT) relief effectively increasing the nil-rate threshold from £125,000 to £300,000 for first-time buyers acquiring properties valued up to £500,000. 

The relief will apply to all purchases with an effective date on or after 22 November 2017. Purchases which complete on or after this date will benefit from the measure.

A first-time buyer is defined as someone who has never owned a freehold or leasehold interest in a dwelling before, and who is purchasing their only or main residence. Residential property anywhere in the world is taken into account when determining whether or not an individual should meet this description.

For joint purchasers, the relief will only apply if both purchasers meet the description of a first-time buyer.

The move is expected to benefit 95% of all first-time buyers nationwide and almost 80% of all first-time buyers in London. The relief will operate as follows:

Purchase Price Rate of SDLT
Up to, and including, £300,000 0%
£300,001 to £500,000 5%
Above £500,000 SDLT is paid at the standard rates on the whole price

A similar ‘holiday’ was introduced for first time buyers in 2010, however the threshold was set lower at £250,000. Due to the operation of the ‘slab’ system for SDLT at that time, purchases over that amount were not able to benefit from the relief at all. The holiday was brought to a close in 2012.

This time, the measure is being described as permanent (subject to being enacted next year), with no time limits, meaning first-time buyers are in no rush to benefit from the relief - other than perhaps in Wales (see below). Further, due to the introduction of the progressive ‘slice’ system in 2014, all first-time purchases up to £500,000 will benefit. Any first-time buyers making purchases over £500,000 will be taxed at the standard SDLT rates on the whole of the purchase price payable (i.e. no partial relief will be available).

The relief has also been drafted so as to apply to qualifying purchases using alternative financial arrangements, e.g. sharia compliant mortgages.

It is not yet known whether similar measures will be introduced for Land and Buildings Transaction Tax (LBTT) in Scotland, or Land Transaction Tax (LTT) for Wales, when it is introduced in April 2018.


Sean Randall

+44 (0)207 6944381



Ginny Offord

+44 (0)207 311 4075


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