Buying your first home is stressful enough without unexpected tax surprises. Yet one of the most common — and expensive — shocks faced by UK buyers happens when purchasing with a partner and discovering, often far too late, that first-time buyer relief does not apply.
Many couples assume that if one person has never owned a property, they automatically qualify for first-time buyer relief. Unfortunately, Stamp Duty Land Tax (SDLT) does not work that way. The rules are far stricter than most buyers realise, and misunderstandings can cost thousands of pounds.
This article breaks down how first-time buyer relief works when buying with a partner, the scenarios where it is lost, and why this issue catches so many buyers off guard.
What First-Time Buyer Relief Is — and Why Couples Get It Wrong
First-time buyer relief is designed to reduce the SDLT burden for people purchasing their first residential property. In simple terms, it allows eligible buyers to pay no SDLT up to a certain threshold, with reduced rates applying above it.
The problem is not the relief itself — it is how buyers interpret eligibility.
When couples buy together, SDLT looks at both buyers, not just one. For first-time buyer relief to apply, every purchaser must meet the definition of a first-time buyer. If even one buyer fails the test, the relief is lost entirely.
There is no partial relief, no averaging, and no discretion.
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Scenario 1: One First-Time Buyer, One Previous Owner
This is the most common situation.
One partner has never owned a property. The other bought a flat years ago, perhaps sold it, or perhaps still owns it. The couple assume the first-time buyer’s status carries some weight.
It does not.
If one buyer has previously owned a residential property anywhere in the world, first-time buyer relief is not available. The transaction is treated as a standard purchase for SDLT purposes.
This often comes as a shock because the couple may have budgeted based on the assumption that first-time buyer relief applied — only to discover a five-figure SDLT bill shortly before completion.
Scenario 2: Overseas Property Ownership and Lost Relief
Another trap is overseas property.
A partner may never have owned a UK home but previously owned property abroad — perhaps a family home, an investment, or even a small inherited share. Under SDLT rules, overseas residential property ownership still counts.
This means first-time buyer relief is lost, even if the buyer has never lived in the property and even if it was sold years ago.
Many buyers simply do not realise that HMRC applies a global definition of property ownership when assessing eligibility for first-time buyer relief.
Scenario 3: Inherited Property and Accidental Disqualification
Inheritance causes more confusion than almost any other area.
If a buyer has inherited a residential property — even a small share — they may no longer qualify as a first-time buyer. Whether first-time buyer relief is available depends on the nature of the inheritance and the interest acquired.
Buyers often assume that because they never bought a property themselves, they remain eligible. In practice, inheriting property can be enough to remove first-time buyer relief, even if the property was immediately sold or never occupied.
This is particularly common where parents pass on property interests without realising the future tax implications for their children.
Scenario 4: Buying With a Non-Resident or Older Partner
Age and residency also play a role.
If one partner previously owned a property decades ago — perhaps before marriage, divorce, or moving abroad — that historic ownership still counts. There is no time limit after which first-time buyer relief resets.
Similarly, where one buyer is non-UK resident and has owned property overseas, first-time buyer relief will not apply, and the transaction may also attract the non-resident SDLT surcharge.
Couples often underestimate how aggressively SDLT rules apply once multiple buyers are involved.
Scenario 5: Unequal Contributions Don’t Matter
Some buyers try to structure purchases so that the first-time buyer contributes most of the deposit or holds a larger beneficial share, assuming this preserves first-time buyer relief.
Unfortunately, SDLT does not work on proportions.
Even if the first-time buyer contributes 99% of the purchase price, first-time buyer relief is still lost if the other buyer has previously owned property. SDLT looks at legal purchasers, not financial contributions.
This misunderstanding regularly leads to last-minute restructuring attempts that rarely succeed.
Why This Mistake Is So Common
There are three main reasons couples get first-time buyer relief wrong:
- Conveyancing assumptions — buyers assume their solicitor will flag everything automatically
- Online oversimplification — most guides describe relief in isolation, not joint purchases
- Emotional logic — “it feels fair” does not align with tax law
The result is that buyers commit to purchases without understanding their true SDLT exposure.
Can First-Time Buyer Relief Ever Be Preserved?
In some limited cases, yes — but only with careful planning before contracts are exchanged.
For example, some buyers choose to purchase in one name only to preserve first-time buyer relief, though this carries legal, mortgage and relationship considerations. Others delay purchases or restructure ownership based on long-term plans.
However, these decisions must be made early. Once contracts are exchanged, SDLT outcomes are largely locked in.
Understanding the rules around first-time buyer relief before committing to a purchase is critical.
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Conclusion
Buying your first home together should be exciting, not financially unsettling. Yet misunderstanding first-time buyer relief is one of the most common ways couples accidentally increase their tax bill.
The key takeaway is simple: when buying with a partner, first-time buyer relief only applies if both buyers qualify. Anything else is an all-or-nothing outcome.
Knowing this early can shape smarter decisions, prevent budget shocks and ensure that when relief is available, it is claimed correctly — and confidently.
