Am I still a first-time buyer if I inherit a property? A Complete 2025 guide
But what happens if you inherit a property? Does that inheritance affect your eligibility? If you sell an inherited property, can you then access first-time buyer benefits again? This comprehensive guide answers these important questions and helps you navigate your next steps if you’ve inherited a property but still wish to buy your ‘first’ home.
Buying your first home is a major milestone, and many prospective buyers and homeowners eagerly anticipate achieving first-time buyer status, not just for the sense of accomplishment but also for the practical benefits it offers.
In today’s housing market, where affordability remains a challenge for many young people and ‘Generation Rent’ continues to expand, first-time buyer schemes offer a financial boost. From reduced Stamp Duty to favourable mortgage deals and government-backed schemes like Help to Buy, being classified as a first-time buyer can make a significant difference.
What is a first-time buyer?
A first-time buyer is typically defined as someone purchasing their first residential property and who has never owned a property before, in the UK or abroad.
This status matters because first-time buyers benefit from:
- Stamp Duty relief (no SDLT on the first £425,000 of a property up to £625,000)
- Government schemes like Help to Buy or First Homes
- Mortgage deals with preferential rates targeted at first-time purchasers
Lenders, solicitors, and HMRC rely on a clear definition of ownership to determine whether someone qualifies as a first-time buyer.
Am I still a first-time buyer if I inherit a property?
Inheriting a property automatically removes your first-time buyer status.
Even though you didn’t purchase the property, ownership is what counts, not how you acquired it.
Even if you’ve never bought before, you will no longer qualify for first-time buyer benefits. This means:
- You can’t claim first-time buyer Stamp Duty relief.
- You won’t be eligible for first-time buyer mortgage deals or government schemes.
- You’ll pay standard rates and may be liable for additional SDLT if you own more than one property.
For example:
If you inherit your parents’ house, become the legal owner, and then wish to purchase another property, even if you’ve never bought before, you will no longer qualify for first time buyer benefits.
Common misconceptions about inheritance and first time buyer status
Many people are surprised by how inheritance affects their status as a first-time buyer, leading to some common misunderstandings.
For example:
I didn’t buy it, so I’m still a first-time buyer.
Incorrect: The UK law looks at ownership, not purchase history.
If I sell the inherited property before buying, I can regain my status as a first-time buyer.
Incorrect: Once you’ve owned a property, even briefly, you lose first-time buyer status permanently.
I only inherited a share of the property, so I’m exempt.
Incorrect: Even part ownership disqualifies you from first time buyer benefits.
Government Schemes for First Time Buyers: 2025 update
Here’s a refresher on the major schemes affected:
Help to Buy ISA: You must never have owned a property before to qualify.
Lifetime ISA: First home purchase must be for your first residential property.
First Homes Scheme: Reserved for first-time buyers with household income caps.
Stamp Duty relief: First-time buyer relief applies only if all purchasers are actual first-time buyers.
These schemes are designed to help those genuinely taking their first step onto the property ladder.
If you inherit a property, even if you later sell it, you’ll no longer meet that definition.
Should I keep the inherited property?
Inheriting a property can seem like an immediate step onto the property ladder, but the reality isn’t always that simple.
You might want or need to sell if:
- The property is in a different location
- The condition requires costly renovations
- There are multiple beneficiaries requiring a sale for equal disruption
- You simply prefer a different home or lifestyle.
Even though you won’t qualify as a first-time buyer anymore, you might have a financial advantage by selling.
You can buy as a cash buyer or use the proceeds as a substantial deposit for your next purchase.
What are the challenges of selling an inherited property?
Selling an inherited property can seem like a straightforward way to realise the value of your inheritance, but the reality is often far more complex.
Several common challenges can delay the sale or make the process more stressful, especially if you’re unfamiliar with the legal and financial responsibilities that come with inheriting a home. Here are some of the main obstacles you may encounter:
Probate delays
Before you can sell an inherited property, the estate must usually go through probate, which is the legal process of sorting out the deceased’s estate. Probate formally confirms who has the authority to manage and distribute the assets, including any property.
The probate process can range from a few weeks to several months, depending on the complexity of the will and how quickly the paperwork is completed. This delay can frustrate plans, especially if you need to access funds quickly or don’t want the responsibility of maintaining the property during the wait.
Outstanding mortgage
Many inherited properties still have a mortgage outstanding at the time of death.
In some cases, the outstanding balance can only be settled by selling the property, which can create pressure to sell quickly, potentially at a price below market value.
If payments lapse during the probate process or if multiple beneficiaries disagree on how to proceed with the property, arrears and interest can accumulate, making the sale more urgent and complicated.
Property condition and maintenance
Inherited homes are often older properties that may not have been modernised or maintained in recent years, sometimes standing empty for long periods before inheritance.
Common issues include:
- Outdated kitchens, bathrooms and décor.
- Structural repairs needed, e.g. damp proofing, leaky roofs, need of rewiring.
- Garden overgrowth and general neglect.
- Clearance required for old possessions, furniture, and personal belongings.
Many buyers on the open market expect a property to be move-in ready and may be deterred by homes that require significant refurbishment or decluttering.
At We Buy Any House, we purchase properties in any condition, so if you are looking to sell an inherited home that has seen better days, We Buy Any House can help.
Buying a property after selling your inheritance
Even though inheriting a property means that you’ve lost your first-time buyer status, selling that property can put you in a stronger financial position than many typical first-time buyers.
Let’s explore how you can use the proceeds of your inherited property wisely when buying your next home, and how this may improve your chances of securing the right property quickly.
Larger deposits reduce mortgage costs
If you sell an inherited property, you may be able to put down a substantial deposit on your next home. This can significantly reduce the amount you need to borrow, improving your mortgage options in several ways:
Lower interest rates: Lenders offer their most competitive rates to buyers with larger deposits.
Reduced monthly repayments: A larger deposit decreases the size of your mortgage and, therefore, your monthly mortgage payments, improving affordability.
Better eligibility: Even if you no longer qualify for first-time buyer schemes, having a larger deposit makes you a more attractive candidate to lenders.
A typical first-time buyer might only save enough for a 5-10% deposit. If you’re using proceeds from an inherited property, you may be able to offer 30% or 40% immediately, improving your borrowing power.
Are there any tax implications I should be aware of when selling an inherited property?
Yes, selling an inherited property may trigger Capital Gains Tax (CGT) if the property has increased in value since the date of death.
While there is no inheritance tax on property you sell (unless the total estate exceeds the inheritance tax threshold when inherited), CGT applies to any gain made from the property’s market value at probate to the eventual sale price.
Frequently Asked Questions: Am I still a first-time buyer if I inherit a property?
Am I still a first-time buyer if I inherit a property?
No, even though you didn’t purchase the inherited property, ownership is what matters.
Once you inherit a property and become the legal owner, you lose your first-time buyer status. This means you won’t qualify for first-time buyer benefits such as Stamp Duty relief or government schemes like Help to Buy.
Can I regain first-time buyer status if I sell the inherited property before buying another home?
Unfortunately, not. First-time buyer status is permanently lost as soon as you have owned a property, regardless of how long you owned it or whether you later sell it.
Once you inherit a property, you can no longer be considered a first-time buyer for legal, tax or mortgage purposes.
What steps must I take to initiate the probate process for an inherited property?
To begin the probate process, you must apply for a Grant of Probate (or Letters of Administration if there is no will). This involves valuing the deceased’s estate, completing any inheritance tax paperwork, and submitting an application to the Probate Registry. You’ll need probate before you can sell most inherited properties.
How can I determine the market value of the inherited property before selling it?
You could ask your local estate agent for a market appraisal or pay a qualified RICS surveyor for one. This valuation is important for both setting a realistic asking price and for probate and tax reporting purposes.
We Buy Any House will provide a free, no-obligation cash offer for your property, inherited or not.
Do I have to sell an inherited property to access the equity?
Not necessarily, you could keep the property, live in it, or let it out as a rental. However, if you want to release funds quickly, for example, to purchase another property, selling is often the most practical route, particularly if multiple beneficiaries need to divide the estate.
How quickly can I sell an inherited property?
The timescale depends on factors such as probate, the property’s condition, and the chosen method of sale. selling through an estate agent typically takes 8-12 weeks or more. If you need to sell quickly, a professional cash buying company like We Buy Any House can complete the process in as little as three days after probate is granted.
Conclusion
Even though you will no longer qualify as a first-time buyer after inheriting or owning a property, selling that inherited property can place you in a much stronger position.
- A larger deposit reduces borrowing costs and opens up better mortgage deals.
- Your financial readiness gives you greater negotiating power in a competitive market.
If your goal is to move quickly or access favourable deals, think carefully about timing. Selling your inherited property first and having funds available before you make your next offer can help you maximise the benefits.
Inheriting a house can be an emotional and complex time, and if you don’t want the hassle of a drawn-out sale or costly repairs, we’re here to help.
At We Buy Any House, we specialise in buying inherited homes quickly, securely, and with no hidden fees. Whether the property is in pristine condition or needs work, we can offer you a straightforward sale on your terms.
- We buy houses in as little as 3 days, or on a timescale that works for you.
- No estate agents, no viewings, and no chains.
- A fair cash offer, with no obligation and no pressure to proceed.
Get your free, no-obligation cash offer today and unlock the value of your inherited property.
Images: © gettyimages, via Canva.com.