Policy paper

Stamp Duty Land Tax — First-time Buyers’ Relief: leases and nominees

Published 6 March 2024

Who is likely to be affected

First-time buyers of residential property in England and Northern Ireland.

General description of the measure

This measure makes changes to the conditions for Stamp Duty Land Tax First-time Buyers’ Relief.

Previously, individuals buying a new residential lease via a nominee or bare trust were unable to claim Stamp Duty Land Tax First-time Buyers’ Relief on their purchase because special rules apply to those arrangements which treat the nominee or the trustee as the purchaser, and not the individual. This meant that victims of domestic abuse who wished to use such arrangements to prevent former partners from finding their new address were unable to claim relief.

This measure amends the conditions for claiming First-time Buyers’ Relief so that individuals using these types of arrangements are able to claim relief, bringing them in line with purchasers of residential freeholds and pre-existing leases using similar arrangements.

Policy objective

This measure ensures that victims of domestic abuse who wish to buy a home through arrangements which preserve their anonymity from their abuser are able to do so without losing their right to claim First-time Buyers’ Relief from Stamp Duty Land Tax.

This supports the government’s objectives on home ownership by reducing the upfront cost of buying a home and provides support to victims and survivors of domestic abuse to help them recover and build new lives.

Background to the measure

This measure was announced at Spring Budget 2024.

Detailed proposal

Operative date

This measure applies to transactions with an effective date (usually the date of completion) on or after 6 March 2024.

Where contracts are exchanged prior to 6 March 2024 but complete or are substantially performed on or after that date, transitional rules may apply in respect of the changes being made to the definition of ‘First-time Buyer’.

This measure does not apply to Scotland or Wales where devolved land transaction taxes apply.

Current law

All references are to the Finance Act 2003.

The rules relating to First-time Buyers’ Relief can be found at section 57B and Schedule 6ZA.The rules relating to trusts and settlements for the purposes of Stamp Duty Land Tax can be found at Schedule 16.

Proposed revisions

Legislation contained in Spring Finance Bill 2024 will amend Schedule 6ZA.

The legislation:

• will insert a new paragraph 3A into Schedule 6ZA so that in cases where the provisions of paragraph 3(2) and (3) of Schedule 16 apply — grants of lease to nominees or bare trustees — the definition of ‘purchaser’ for the purposes of First-time Buyers’ Relief will relate to the person or persons for whom the nominee or trustee is acting, rather than the nominee or trustee
• will amend the definition of ‘first-time buyer’ at paragraph 6 of Schedule 6ZA so that individuals who have previously purchased a lease to which the provisions of paragraphs 3(2) and (3) of Schedule 16 are not treated as a first-time buyer

Summary of impacts

Exchequer impact (£million)

2023 to 2024	2024 to 2025	2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029
Negligible	Negligible	Negligible	Negligible	Negligible	Negligible

This measure is expected to have a negligible impact on the Exchequer.

Economic impact

This measure is not expected to have any significant macroeconomic impacts.

Impact on individuals, households and families

The measure will benefit certain first-time buyers of residential leasehold properties, reducing the upfront cost of buying a home.

This measure is expected to have a positive impact on family formation by supporting survivors of domestic abuse who wish to use nominee or bare trust arrangements to buy new residential leases in order to maintain their security from former partners.

Customer experience is expected to improve by bringing the rules for claiming First-time Buyers’ Relief when using nominee or bare trust arrangements in line with those applying elsewhere in the SDLT framework. This will simplify the rules for customers looking to claim relief.

Equalities impacts

The benefits of this measure will fall to those who are buying residential property, which is expected to be in line with the existing distribution of home ownership. This measure is not expected to impact on this distribution for any protected group.

Impact on business including civil society organisations

This measure is expected to have a negligible impact on lawyers and conveyancers who advise purchasers on property transactions where nominee or bare trust arrangements are used. One-off costs may include familiarisation with the amended SDLT rules for first-time buyers. Customer experience is expected to remain broadly the same as it does not alter how businesses interact with HMRC. There is no impact on civil society organisations.

Operational impact (£million) (HMRC or other)

HMRC will need to make a small change to published guidance to reflect the changes introduced by this measure. This is expected to have a negligible cost.

No other operational costs are expected to be incurred.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

Statistics about the use of SDLT First-time Buyers’ Relief are regularly collated and published. The measure will be kept under review through communication with affected taxpayer groups.

Further advice

If you have any questions about this change, contact the HMRC SDLT Helpline on Telephone: 0300 200 3510 (from abroad +44 1726 209 042).