Buying a home is a significant milestone in many people's lives. For first-time buyers, taking that first step onto the property ladder can be both exciting and challenging. However, understanding the qualifications and benefits of being a first-time buyer is crucial to make informed decisions.

In this article, we will explore what it means to be a first-time buyer in Scotland, the qualifications required, and the advantages of being classified as such. To find out more about being a first-time buyer, we have a fully comprehensive First-Time Buyers Guide. Our team are also available on 01224 087284. 

What Defines a First-Time Buyer?

The definition of a first-time buyer may vary depending on different factors. While it may seem straightforward, there are nuances that need to be considered. In general, a first-time buyer is someone who is purchasing a property for the first time and does not already own a residential property. However, let's delve deeper into specific scenarios that may affect your eligibility as a first-time buyer.

1. Previous Property Ownership

If you have previously owned a house or flat, either in the UK or abroad, you may not qualify as a first-time buyer. Owning a property, regardless of whether you bought it or inherited it, disqualifies you from the first-time buyer status.

2. Commercial Property Ownership

Interestingly, owning commercial property, such as a shop, restaurant, or garage, does not automatically exclude you from being classified as a first-time buyer of residential property. The key distinction is whether the commercial property includes living quarters. If it does not, you can still be considered a first-time buyer.

3. Inherited Property

Inheriting a property poses a challenge to being classified as a first-time buyer. If you have inherited a house or flat, you have an asset that could potentially be sold to finance a new home purchase. Consequently, you would not be eligible for first-time buyer benefits.

4. Property Bought by Family

If your family has purchased a property on your behalf, you lose your first-time buyer status. Even if you are living in a property owned by your family, once the house or flat is legally yours, you are no longer considered a first-time buyer.

5. Buy-to-Let Property and Homes Abroad

Owning a buy-to-let property or a home abroad will impact your eligibility as a first-time buyer. The rationale is that these properties can be sold to fund your primary residence, making you ineligible for first-time buyer benefits.

6. Buying with Someone who Owns Property

If you are purchasing a property with someone who has previously owned a residential property, you will not qualify as a first-time buyer. Both individuals on the mortgage must meet the criteria of never having owned a house or flat before to be eligible for first-time buyer benefits.

7. Marriage or Cohabitation with a Property Owner

Marriage or cohabitation with a Partner who already owns a property and will continue to own that property when you complete your purchase will likely mean that you will not be treated as a first-time buyer and result in you being responsible for Additional Dwelling Supplement (ADS). 

Benefits of Being a First-Time Buyer

Although the path to homeownership for first-time buyers can be challenging, there are several benefits and incentives available to make the process more manageable. Let's explore some of these advantages:

1. Land and Buildings Transaction Tax First Time Buyer Relief

First-time buyers in Scotland can benefit from Land and Buildings Transaction Tax (LBTT) relief, which reduces or eliminates the amount payable.

2. Lifetime ISA Benefits

One valuable benefit for first-time buyers is the Lifetime ISA (Individual Savings Account). This savings account allows you to save for your first home while receiving a government bonus on your contributions.

3. Lender Deals for First-Time Buyers

It's worth noting that some lenders may offer special deals and incentives for first-time buyers from time to time. These deals can include reduced interest rates or lower down payment requirements, making it easier for first-time buyers to secure a mortgage.

Conclusion

Understanding the qualifications and benefits of being a first-time buyer is essential when embarking on the journey to homeownership. While the criteria for first-time buyer status may vary, it is crucial to assess your eligibility to make informed decisions. By taking advantage of the benefits available, such as stamp duty relief and government schemes, first-time buyers can make the process of buying a home more manageable. 

CONTACT OUR PROPERTY SOLICITORS IN ABERDEEN AND STONEHAVEN TODAY

If you are looking to buy property, contact one of our solicitors today for comprehensive advice and support. Contact us on 01224 087284 or complete our online enquiry form, and a member of the team will be in touch.