Help to Buy and First-Time Buyer Stamp Duty

Help to Buy Schemes Overview

“Help to Buy” was a family of government schemes designed to help first-time buyers and existing homeowners purchase property with smaller deposits. The main schemes were:

• Help to Buy Equity Loan: Government lent up to 20% (40% in London) of the property purchase price interest-free for 5 years. Closed to new applications October 2022; completed March 2023.
• Help to Buy ISA: A savings account with a 25% government bonus on savings (max £3,000 bonus). Closed to new accounts December 2019; existing accounts can be used until December 2029.
• Lifetime ISA (LISA): A broader ISA that also gives a 25% government bonus (max £1,000/year). Still available for first-time buyers as of 2026.
• First Homes: A newer scheme offering discounts of at least 30% to key workers and local first-time buyers. Still active in some areas.

Help to Buy Equity Loan and SDLT

The single most important SDLT principle for Help to Buy equity loan purchases is this: the equity loan is not subject to SDLT.

SDLT is calculated on the “chargeable consideration” for a property purchase — essentially, the amount paid for the property. The Help to Buy equity loan was structured as a separate loan from the government (not as part of the purchase price) and therefore did not constitute chargeable consideration.

According to GOV.UK — First-time buyers, SDLT on Help to Buy purchases was calculated on the full purchase price — meaning the full price including the government loan element, but not twice. The loan was not taxed separately.

Why No SDLT on the Equity Loan?

The equity loan was provided by Homes England (the government housing agency) under a separate legal agreement from the main property purchase. The loan gave the government a share of the property's future value rather than constituting a separate purchase transaction.

Because the loan did not involve a separate transfer of property or a separate acquisition of a chargeable interest, it was not subject to SDLT as a standalone transaction. The buyer paid SDLT once, on the full purchase price, using FTB rates if applicable.

This structure meant buyers with a Help to Buy equity loan were not penalised by paying SDLT on both the purchase price and the loan — they paid SDLT only on the purchase price, exactly as they would have without the scheme.

FTB Relief + Equity Loan

When both Help to Buy equity loan and FTB relief applied to the same purchase, they combined straightforwardly. The buyer calculated SDLT on the purchase price using FTB rates (0% up to £300,000, 5% on £300,001–£500,000). The government loan had no impact on this calculation.

The FTB £500,000 price cap applied to the purchase price, not the net amount funded by the buyer. This meant a buyer purchasing a £480,000 property with a £96,000 equity loan (20%) still benefited from FTB relief — the purchase price of £480,000 was under the cap.

As confirmed in the SDLT relief for first time buyers guidance, FTB eligibility is assessed on the buyer's ownership history and the property price — the funding mechanism does not affect relief.

Worked Examples: Equity Loan

Help to Buy ISA and SDLT

The Help to Buy ISA allowed first-time buyers to save up to £200/month and receive a 25% government bonus (max £3,000) on top of their savings. The bonus was not paid directly to the buyer — it was paid by the government to the solicitor at completion, after exchange of contracts.

For SDLT purposes, the Help to Buy ISA bonus has no impact. The bonus is not part of the purchase price and does not constitute chargeable consideration. Your SDLT is calculated on the agreed purchase price, exactly as it would be without the ISA.

There is also no interaction between ISA savings and FTB eligibility. Using a Help to Buy ISA or Lifetime ISA does not create any ownership interest that would disqualify you from FTB relief.

Lifetime ISA and SDLT

The Lifetime ISA (LISA) allows savers aged 18–39 to save up to £4,000/year and receive a 25% government bonus (max £1,000/year) for a first property purchase or retirement. Unlike the Help to Buy ISA, the LISA bonus is paid into your account and forms part of your deposit at purchase.

The LISA bonus does not change the purchase price and therefore has no impact on SDLT. You pay SDLT on the agreed purchase price — the LISA bonus is simply part of your deposit funding. FTB relief applies or not based solely on your ownership history and the purchase price.

According to MoneyHelper — First-time home buyer guide, the LISA is the most flexible savings-based scheme still available to first-time buyers in 2026, with the bonus adding directly to your purchasing power.

ISA Schemes vs Equity Loan: SDLT Summary

First Homes Scheme and SDLT

The First Homes scheme offers discounts of at least 30% on new-build properties to eligible first-time buyers (typically key workers and local residents). Unlike Help to Buy, First Homes is still active in some areas.

For SDLT, the First Homes discount is treated differently from Help to Buy. SDLT is calculated on the discounted purchase price paid, not the full market value. This means you pay SDLT on the reduced price, making the SDLT bill lower as a direct result of the discount.

If you are also a first-time buyer, FTB relief applies to the discounted price in the normal way. For example, a property with a market value of £400,000 offered at a 30% First Homes discount has a purchase price of £280,000 — and FTB relief at 0% would apply to the full purchase price.

Current Schemes Available in 2026

As of March 2026, the main government schemes available to first-time buyers are:

• Lifetime ISA: Save up to £4,000/year with 25% bonus (up to £1,000/year). Usable on properties up to £450,000.
• Help to Buy ISA: Existing accounts (opened before Dec 2019) can still receive the bonus on purchases until December 2029.
• Shared Ownership: Buy a share of a property and pay rent on the rest. See our FTB shared ownership relief guide.
• First Homes: Available on selected new-build developments. Eligibility criteria vary by area.
• Mortgage Guarantee Scheme: Allows lenders to offer 95% mortgages with government backing. Extended to 2025.

For all of these, SDLT and FTB relief rules operate independently of the scheme — calculate your SDLT based on the purchase price you pay, and apply FTB relief if eligible. Use our first-time buyer calculator to get your exact figures.

Frequently Asked Questions

Sources

1. GOV.UK — First-time buyers
2. GOV.UK — SDLT relief for first time buyers
3. MoneyHelper — First-time home buyer guide