Scullion News & Resources

If you’re hoping to get your foot on the Scottish property ladder for the first time, there is support available. From various allowances to handy tips, this article answers key questions on making your initial home purchase smooth and explores available help for first-time buyers in Scotland.

Is there any help for first-time buyers in Scotland?

Yes, the Scottish government provides financial help aimed at aspiring first-time buyers in several forms:

Help to Buy ISA

This special account lets first-time buyers earn interest while saving. It also secures a 25% government bonus up to £3000 to put towards buying a first house.

Smaller Deposits

Many lenders enable new buyers to put down 5–10% deposits rather than the minimum of 20%. This makes getting a foot on the ladder more viable.

In summary, yes, purchasing help exists so newcomers can overcome obstacles to owning their premiere property.

What is the First-Time Buyers Allowance in Scotland?

Known also as the First Home Fund, the First-Time Buyers Allowance lets new owners recoup the LBTT they paid when buying their first home.

You can claim back up to £175,000 of the LBTT paid. If you bought a flat for £180,000 and paid £600 in LBTT, you could claim back that £600 after moving in.

To be eligible, the purchased property must be:

  • Your only residence
  • Bought for less than £175,000
  • Bought solely by first-time buyers. Joint buyers must ALL be new owners; civil partners and married couples count as one buyer.

This allowance takes some of the sting out of paying property taxes as a new entrant to the market.

What Benefits Can I Claim as a First-Time Buyer?

Alongside reclaiming LBTT via the First Home Fund, other financial perks when purchasing your first property include:

Lower Home Improvement VAT

One of the main financial perks for first-time buyers in Scotland is the reduced 5% VAT rate on home improvement costs for properties sold under £350,000.

Typically, residential property repair and renovation work is subject to 20% VAT, which can substantially increase bills. However, there is a special 5% VAT provision for first-time buyers on home improvements when the purchase price is less than £350,000.

This discounted rate can lead to major savings if essential repairs or refurbishments are needed when you first move in. It also gives first-time buyers extra scope to make custom upgrades. Over time, these VAT savings quickly accumulate, leaving more funds to turn the house into a home. So the lower rate takes some of the headache out of getting key jobs done as a new owner.

Higher LBTT Allowance

The zero-rated Land and Buildings Transaction Tax (LBTT) threshold when buying property typically stands at £145,000. As a first-time buyer, this is extended to £175,000 before any tax applies.

This means first-timers can buy a more expensive first home before paying any purchase tax. So the elevated threshold exclusive to new buyers provides added help to those entering the tricky property market.

Government Bonus on Savings

The Help to Buy ISA assists first-time buyers to save for a home deposit. As well as tax-free interest, it pays a 25% government contribution bonus up to £3000 when used to buy your first property. This savings top-up, along with tax breaks, aims to help newcomers take their first step.

In summary, there are several purchase advantages only for first-timers. These schemes make entry into the market less difficult.

Tips for First-Time Homebuyers

Beyond financial help, here is some guidance to set you up for success when navigating your first property purchase:

Get professional support – Using a solicitor and mortgage broker removes stress and saves money long-term.

Research lenders – Compare mortgages suited for first-timers requiring small deposits. A broker can help assess the options.

Save little and often – Even small, regular savings contributions soon mount up for that vital deposit.

Consider new builds – These may come with deals for new buyers and lower VAT on the work needed.

Factor in all costs – On top of the purchase price, remember to budget for taxes, fees, and furnishings.

Take your time – This is a huge purchase so don’t feel rushed; it’s wise to spend time viewing different properties.

Stay open-minded – Compromise on the non-essentials if it means affording your dream neighbourhood.

Review the Home Report – Get the home report and ask questions so you can avoid nasty surprises later.

Emotion vs. practicality – It’s easy to fall for period features over practicalities; have a balance of both.

Contact Expert Conveyancing Solicitors

Not sure how to fully take advantage of all the available help for first-time buyers? We’re here to help. Our expert conveyancing solicitors are known for being thorough, accurate, and communicative. Contact our property law team today!

With determination, saving, and support, you can get the keys to your first home. Follow the guidance above, and you’ll soon be moving into your ideal starter home.

Our friendly and approachable law team are ready to support you

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