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Find out more'Does my daughter count as a first-time buyer?'
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My two daughters each inherited an ownership share of three rental properties.
This ownership had been within a bare trust. Now one of my daughters wishes to buy her first home.
Will she qualify as a first-time buyer for the purposes of stamp duty?
J Maxwell from Surrey
'Even part-owning a rental property means you're not a first-time buyer'
Samm Galloway, Which? Money expert, says...
Unfortunately, neither of your daughters will be considered first-time buyers when they come to buy their own home.
To fall into this category, you must not have previously owned or held a major interest (a share worth more than £40,000) in a residential property anywhere in the world.
This can include property you inherited or that was gifted to you.
As a result, your daughter will pay stamp duty land tax (SDLT) if she purchases a property for more than £250,000 (rather than the £425,000 threshold that currently applies to first-time buyers).
Your daughter could also end up paying additional stamp duty
Unfortunately, things could end up even more expensive, depending on when your daughter inherited the properties.
She could also end up paying additional SDLT, if her interest in the rental properties is worth more than £40,000. This is charged at a rate of 3% of the full purchase price in England and Northern Ireland (see our guides for Wales and Scotland).
There is an exemption for inherited property. If a beneficiary inherits an interest in a residential property less than three years before they buy another property, the inherited property can be ignored.
This is provided that they became a joint owner through inheriting their interest and their share (and that of any spouse/civil partners) doesn’t exceed 50%, as in your daughters' cases.
If the interest in the property was inherited more than three years before the purchase of the new property, then it will count as an additional property.
- Find out more: Stamp duty calculator
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