TL;DR: A first-time buyer is someone who has never owned a residential property anywhere in the world, including jointly. The status unlocks specific tax reliefs and government schemes: First Time Buyers' Relief from Stamp Duty Land Tax in England and Northern Ireland, the Lifetime ISA bonus of 25 percent on savings up to 4,000 pounds a year, and access to schemes such as Shared Ownership and First Homes. The mortgage process, deposit, conveyancing and survey work are essentially the same as for any home purchase. Devolved nations use Land and Buildings Transaction Tax (Scotland) or Land Transaction Tax (Wales) with different rules.
Last reviewed May 2026
Buying a first home is the single largest financial decision most people ever make. The process can feel mysterious from the outside but it follows a predictable order: save a deposit, get a mortgage in principle, find a property, agree a price, instruct a solicitor, have a survey done, exchange contracts and complete. Each of those stages has costs, paperwork and decisions that affect the final price.
First-time buyer status itself unlocks specific advantages. The Stamp Duty Land Tax relief in England and Northern Ireland reduces or removes the tax on properties up to a certain value. The Lifetime ISA pays a 25 percent government bonus on savings used towards a first home (subject to its rules). Affordable home ownership schemes such as Shared Ownership and First Homes are aimed mainly at first-time buyers and people who do not currently own a home.
This guide explains what counts as a first-time buyer, the tax and savings advantages that come with that status, the typical costs of buying, and the steps from deposit to keys.
Who counts as a first-time buyer
For Stamp Duty Land Tax purposes in England and Northern Ireland, a first-time buyer is someone who has never owned a major interest in a residential property anywhere in the world, either alone or jointly. That includes inherited property and property held in trust. Where two people are buying together, both must meet the test for the relief to apply to the purchase.
For the Lifetime ISA, the rules are slightly different. The saver must be opening the account between the ages of 18 and 39, and to use the bonus to buy a first home, the property must be their first home, the purchase price must be at or below the LISA cap (currently 450,000 pounds), the mortgage must be a residential mortgage with a UK lender, and the saver must intend to live in the home.
The First Homes scheme in England uses its own definition. A buyer must be a first-time buyer (using broadly the SDLT definition), have a household income below 80,000 pounds (90,000 pounds in London) and meet any local connection criteria the council has set.
Stamp duty relief and what it actually saves
In England and Northern Ireland, Stamp Duty Land Tax First Time Buyers' Relief is currently available where the price is up to 500,000 pounds. No SDLT is payable on the first 300,000 pounds, with 5 percent payable on the portion between 300,001 pounds and 500,000 pounds. Above 500,000 pounds, no first-time buyer relief is available and the standard SDLT rates apply on the whole price. These thresholds were due to change at the end of the 2024 to 2025 tax year and the position from 1 April 2025 should be checked on GOV.UK before any purchase, as Budget changes can move the figures.
Scotland uses Land and Buildings Transaction Tax with its own first-time buyer relief, raising the nil-rate threshold for first-time buyers. Wales uses Land Transaction Tax, which has no specific first-time buyer relief but uses higher general nil-rate thresholds. Each devolved tax has its own bands; the Revenue Scotland and Welsh Revenue Authority calculators give the live figures.
Worked example using current SDLT figures: a first-time buyer purchasing for 400,000 pounds in England pays no SDLT on the first 300,000 pounds and 5 percent on the next 100,000 pounds, giving a total bill of 5,000 pounds. A non-first-time buyer at the same price would pay considerably more. The relief is claimed via the SDLT return submitted by the conveyancer.
Lifetime ISA: 25 percent on top of savings
A Lifetime ISA can be opened between the ages of 18 and 39, with up to 4,000 pounds paid in each tax year (the LISA contribution counts toward the overall 20,000 pound annual ISA allowance). The government adds a 25 percent bonus to each contribution. Bonuses are paid monthly. Contributions can continue until the saver's 50th birthday.
To use the funds and bonus to buy a first home, the property must be the saver's first home, the purchase price must be at or below 450,000 pounds, the mortgage must be a residential mortgage and the LISA must have been open for at least 12 months. The conveyancer requests the funds directly from the LISA provider and applies them to the purchase.
Withdrawing for any other reason before age 60, other than for terminal illness or after death, triggers a 25 percent withdrawal charge on the amount taken out. That charge can leave the saver with less than they paid in, because it is calculated on the gross withdrawal including the bonus. The right approach to the LISA depends on the saver's likely use of it.
Schemes aimed at first-time buyers
Several government and provider schemes can help first-time buyers stretch a deposit further. Shared Ownership lets a buyer purchase a share of a leasehold property and pay subsidised rent on the rest, with the option to buy more shares later. First Homes are new-build properties sold with a discount of at least 30 percent off the open market value, with that discount preserved on resale through a covenant.
The Mortgage Guarantee Scheme allows lenders to offer 95 percent loan-to-value mortgages on properties up to 600,000 pounds with a government-backed guarantee on part of the loan. The scheme has been extended at various points and the current status should be confirmed on GOV.UK.
Older schemes such as Help to Buy: Equity Loan in England closed to new applications. The Welsh Help to Buy scheme has its own timetable. Scotland's Open Market Shared Equity (OMSE) and New Supply Shared Equity (NSSE) continue under the Scottish Government's framework. Each scheme has its own eligibility test, price cap and process.
Costs to plan for beyond the deposit
The deposit is the largest upfront cost but not the only one. A first-time buyer should budget for legal fees and disbursements (typically searching, registration and Land Registry fees), a property survey (level 1 condition report, level 2 homebuyer report or a level 3 building survey), mortgage arrangement fees, valuation fees if not included by the lender, and removal costs.
Stamp duty in England and Northern Ireland is paid on completion. Land Transaction Tax in Wales and Land and Buildings Transaction Tax in Scotland are equivalent taxes with separate bands and reliefs. The conveyancer collects the tax due from the buyer at completion and submits the return.
Ongoing monthly costs are mortgage payments, building insurance (a lender requirement), contents insurance (recommended), council tax, utilities and any service charge or ground rent (for leasehold properties; ground rent on most new long residential leases is restricted to a peppercorn under the Leasehold Reform (Ground Rent) Act 2022). Affordability assessments by lenders include these costs.
Mortgage steps and the affordability test
A mortgage in principle (sometimes called a decision in principle or agreement in principle) is a written indication from a lender of how much it would in principle be prepared to lend, based on a soft credit check and the basics of income and outgoings. It is not a binding offer but it shows estate agents that the buyer can fund a purchase.
A full mortgage application happens after a property is agreed. The lender carries out detailed affordability checks, an income evidence review, a hard credit search and a property valuation. The Financial Conduct Authority's Mortgage Conduct of Business rules require lenders to assess that a mortgage is affordable, applying a stress test against possible future interest rate rises.
The mortgage offer is typically valid for around six months. Completion happens once contracts are exchanged, the deposit balance has moved to the seller's solicitor, and the lender has released funds. The keys are handed over on the completion date and the new owner becomes liable for the home from that day.
Disclaimer: This article is general information for first-time buyers in the UK. It is not personal mortgage, tax or legal advice. Eligibility, tax bills and access to schemes depend on individual circumstances and current rules, which change from time to time. Anyone planning to buy should check current GOV.UK guidance, take regulated mortgage advice and instruct a solicitor or licensed conveyancer for the legal work.
Frequently asked questions
What disqualifies someone from being a first-time buyer?
For SDLT purposes, anyone who has previously owned (or part-owned) a residential property anywhere in the world is not a first-time buyer. That includes inheriting property and being on the title of a buy-to-let with a partner. Where two people buy together, both must qualify for the relief to apply to the purchase.
How much deposit does a first-time buyer typically need?
Most lenders require a deposit of at least 5 percent of the purchase price, though access to the best interest rates usually requires 10 percent or more. The Mortgage Guarantee Scheme supports 95 percent loan-to-value mortgages on certain properties. A larger deposit reduces monthly payments and can widen the choice of mortgage products.
Can a first-time buyer use a Lifetime ISA and a Help to Buy ISA together?
The two products coexisted but the bonuses cannot be used together on the same property purchase. A saver can hold both, but only one bonus can be applied. Help to Buy ISAs closed to new accounts in November 2019; existing account holders can continue to save into them and claim the bonus on a first home up to the eligible price cap.
Does a first-time buyer have to use a Shared Ownership home?
No. First-time buyer status applies to standard purchases too. Shared Ownership is one option for buyers who cannot raise the deposit and mortgage for a full purchase in their area. Many first-time buyers buy outright on the open market or use other schemes such as the Mortgage Guarantee Scheme.
What happens if a first-time buyer's circumstances change before completion?
A material change in income, employment or credit position should be notified to the mortgage lender, because the offer is conditional on the information given at application. The lender may need to reassess affordability. Conveyancing can normally pause while the position is reviewed, although timelines and any related costs depend on how far through the process the buyer is.
How we verified this
The definition of a first-time buyer for SDLT, the relief thresholds and the rules around joint purchases reflect HMRC's published SDLT manual and the Finance Act 2003. The Lifetime ISA rules, including the property price cap, age limits and 25 percent withdrawal charge, are taken from current GOV.UK guidance and the underlying Savings (Government Contributions) Act 2017. The Mortgage Guarantee Scheme, First Homes and Shared Ownership reflect current GOV.UK and Homes England guidance. Devolved tax rules are drawn from Revenue Scotland and the Welsh Revenue Authority. Figures and thresholds change periodically, particularly at fiscal events, and should be reconfirmed on GOV.UK before being relied on.
