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What is classed as a first time buyer?

What is classed as a first time buyer?
Kellie Steed

Author: Kellie Steed - Content Writer

Updated: June 30, 2022

It may seem superfluous to define the term first-time buyer, as surely, this is simply a person buying their first home, and there’s nothing more to think about, right? Well, partly so, but since the abolition of stamp duty for first-time buyers in 2017, the term has morphed from a simple description, into what is essentially a legal term. If you’re confused, you’re by no means alone, so bear with us whilst we unravel this often overlooked homebuyer tripwire.

Oxford English Dictionary vs. the UK Government

Clearly, a first-time buyer is someone buying their first home. If you were to look at the Oxford Dictionary, however, the actual definition is a person who is buying a house or flat for the first time and therefore has no house or flat to sell’.

The difference here is that there is room for the assumption that, if someone has no property to sell, then they have never owned one. It’s fair to say, therefore, that a mortgage broker or lender could treat a person as a first-time buyer if they had no property to sell.

The problem here lies in the government’s definition of a first-time buyer because their description is based on entitlement to a tax break. Therefore it treats the term far more like virginity, in that once you’ve owned a home, you can never be a first-time buyer again, even if you don’t currently have a property to sell.

Are you a virgin homebuyer?

Because of the legal weight now carried by the term first-time buyer, we need to be very careful about how we present ourselves when looking to buy a home. Even if you only owned half of a 25% shared ownership property with an ex-partner, 20 years ago, you would not be considered a first-time buyer if you were to apply for a mortgage today.

Only those mortgage applicants who have literally never owned a home are entitled to the stamp duty benefit, which allows first-time buyers to purchase any home up to the value of £300,000 (£500,000 in London) without any stamp duty liability. The criteria restrict first-time buyers to be people who have never owned or part-owned any form of property anywhere in the world and even go so far as to include caravan ownership.

Is there a way around this?

No there isn’t. The government has this one sewn up, so if you do present yourself as a first-time buyer, but don’t meet their definition, it will be considered fraud. If caught, you would likely have to pay an additional fine on top of the stamp duty you owe, not to mention having a criminal record.

Unfortunately, for those homebuyers in second relationships, or perhaps who’ve invested in buy-to-let properties before having owned their own home, it’s impossible to legally avoid stamp duty, even if you’ve changed your name since.

Of course, this shouldn’t be too much of an issue for those younger homebuyers who have found themselves unwitting purveyors of ‘generation rent’, as the likelihood of owning a garden shed before your 30th birthday is a pipe dream for many these days!

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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