First Time Buyer Legal Guide - Part 1

by Ian Creighton

I’m a First Time Buyer … I think …

We regularly get contacted by people who believe they are First Time Buyers, only to find out two or three questions later that they are not. As odd is it sounds it is possible to lose your First Time Buyer status quite inadvertently.

As one would perhaps expect, the phrase First Time Buyer refers to a person who is purchasing a residential property for the first time.

Depending on the benefit or relief that is being sought the term First Time Buyer may be interpreted slightly differently, but the spirit of the definition always remains that someone should never have owned an interest in a residential property in Northern Ireland or anywhere else in the world.

Sounds simple enough, yet there are some quite common scenarios that result in losing your First Time Buyer status without you ever considering that you have owned a home.

How you can inadvertently lose your First Time Buyer status

A common misunderstanding among purchasers is that because they are buying their first home that they intend to live in they are therefore a First Time Buyer. However the focus is actually on whether you were named as a registered owner of any property, whether you lived in it or not. As such, you will lose your First Time Buyer status if:

  • Your parents decided to transfer the property into the names of their children, so that you and your siblings each became registered owners even though they carried on living at the property.
  • You have ever invested in a Buy to Let property with family or friends, even if you never lived in it and have since sold the property
  • You have ever been named as a registered owner to assist a friend or family member to reach affordability even though you never lived at the property or profited in anyway, or even made any financial contribution to it
  • You have ever inherited a property and it was assented into your name, even if you never lived in it and even if it has since been sold
  • In the case of a joint purchase only one of you is a First Time Buyer. In order to avail of the First Time Buyer Stamp Duty Land Tax exemption all purchasers must be First Time Buyers. If your co-purchaser is not, you lose your First Time Buyer status for Stamp Duty purposes.

 

Protect your First Time Buyer status

It is therefore essential that you consider your First Time Buyer status as something to protect. If you are approached about joining in on a purchase of a property to help someone with affordability, or because your parents want to make plans for the future, be mindful of the financial consequences of becoming an owner of a property ahead of completing the purchase of your first home. Secondly, be sure to take advantage of the financial incentives and benefits available to you. These will change and develop over time, so stay aware of the perks of your First Time Buyer status.

In the second part of our Legal Guide we'll be looking at some of the financial advantages and options available for First Time Buyers.