UK First-Home Buyer Schemes: Lifetime ISA, Shared Ownership and SDLT Relief 2026/27
Getting on the ladder is easier when you combine the schemes built for first-time buyers. The Lifetime ISA adds a 25% government bonus (up to GBP 1,000 a year) to your deposit, shared ownership lets you buy a share of a home with a smaller deposit, and first-time buyer stamp duty reliefmeans no SDLT on the first GBP 300,000 of a home up to GBP 500,000. This guide explains each scheme for 2026/27, how they stack, and works through the numbers.
Lifetime ISA limit: GBP 4,000/year (25% bonus, up to GBP 1,000)
LISA property cap: GBP 450,000
ISA allowance: GBP 20,000 (LISA sits within this)
First-time buyer SDLT: 0% to GBP 300,000 (cap GBP 500,000)
Standard SDLT bands: 0% to GBP 125k, 2% to GBP 250k, 5% to GBP 925k
Shared ownership: buy a 25% to 75% share, rent the rest
Typical deposit: 5% minimum, 10%-plus for better rates
Overview of First-Home Schemes
First-time buyers in the UK can draw on several schemes that lower the cost of getting on the ladder. They fall into three groups: deposit boosters (the Lifetime ISA), part-buy options (shared ownership), and tax reliefs at purchase (first-time buyer stamp duty relief). These work independently, so the same buyer can benefit from more than one.
Each scheme has its own rules and limits, and the right combination depends on your budget, the price of the home, and where in the UK you are buying. Scotland and Wales operate their own property taxes (LBTT and LTT) with different first-time buyer rules, while the SDLT figures below apply to England and Northern Ireland.
The Lifetime ISA
The Lifetime ISA (LISA) is open to people aged 18 to 39. You can pay in up to GBP 4,000 a year -- within your overall GBP 20,000 ISA allowance -- and the government adds a 25% bonus, up to GBP 1,000 a year. Save the maximum and you receive the maximum bonus.
To use a LISA for a first home: the property must cost no more than GBP 450,000, you must buy with a mortgage, and the account must have been open at least 12 months. Withdraw for any other reason before age 60 (other than terminal illness) and a 25% government withdrawal charge applies -- which can take back more than the bonus, so a LISA suits committed savers.
Two first-time buyers purchasing together can each hold a LISA and combine their bonuses, adding up to GBP 2,000 of government money a year towards one deposit.
Shared Ownership
Shared ownership lets you buy a share of a home -- typically 25% to 75% -- and pay rent on the remaining share owned by a housing provider. You need a mortgage and deposit only on the share you buy, so the upfront cost is far lower than buying outright. Eligibility is usually tied to a household income cap.
Over time you can buy further shares through staircasing, increasing your ownership and reducing the rent. Many leases allow staircasing all the way to 100%, at which point you own the home outright. Check the lease for the minimum share, any fees, and the maximum you can reach.
First-Time Buyer SDLT Relief
In England and Northern Ireland, first-time buyers pay no Stamp Duty Land Tax on the first GBP 300,000 of a property costing up to GBP 500,000. The standard rates apply to the portion between GBP 300,000 and GBP 500,000. If the price exceeds GBP 500,000, the relief is lost and normal rates apply to the whole purchase.
The standard residential SDLT bands are:
0% on the portion to GBP 125,000
2% on the portion from GBP 125,000 to GBP 250,000
5% on the portion from GBP 250,000 to GBP 925,000
10% on the portion from GBP 925,000 to GBP 1.5m
12% on the portion above GBP 1.5m
Both buyers must be genuine first-time buyers to claim the relief on a joint purchase.
Building the Deposit
Lenders usually require at least a 5% deposit, but a 10% to 15% deposit lowers the loan-to-value ratio and unlocks better rates. On a GBP 250,000 home, 5% is GBP 12,500 and 10% is GBP 25,000.
This is where the Lifetime ISA earns its keep -- the 25% bonus boosts the deposit directly. Saving the full GBP 4,000 a year for several years, with the bonus and any interest or investment growth on top, can build a meaningful deposit and improve the mortgage rate you qualify for, reducing payments and total interest.
Combining the Schemes
The schemes stack. A typical path is: build the deposit in a Lifetime ISA (collecting the 25% bonus), then at completion claim first-time buyer SDLT relief if you qualify. Shared ownership can sit alongside this for buyers who cannot yet afford a full purchase.
Watch the differing price limits: the LISA can be used on homes up to GBP 450,000, while first-time buyer SDLT relief runs up to GBP 500,000. A home priced between these figures would still qualify for SDLT relief but could not use LISA funds without triggering the 25% withdrawal charge -- a key planning point if you are buying near the cap.
Worked Examples
Example 1 -- LISA bonus over four years. Aisha pays GBP 4,000 a year into a LISA for four years -- GBP 16,000 of her own money. The government adds GBP 1,000 each year, GBP 4,000 in total, giving GBP 20,000 before any growth. With a partner doing the same, the couple build a GBP 40,000 deposit, of which GBP 8,000 is government bonus, towards their first home.
Example 2 -- stamp duty as a first-time buyer. Ben and Chloe, both first-time buyers, purchase a home for GBP 360,000 in England. First-time buyer relief means 0% on the first GBP 300,000, then 5% on the GBP 60,000 above it -- GBP 3,000 of SDLT. A non-first-time buyer on the same price would pay 0% to GBP 125,000, 2% on the next GBP 125,000 (GBP 2,500) and 5% on the GBP 110,000 above GBP 250,000 (GBP 5,500), totalling GBP 8,000. The relief saves Ben and Chloe GBP 5,000.
Together, the Lifetime ISA bonus and the SDLT saving meaningfully reduce the cash needed to buy a first home.
Frequently Asked Questions
How does the Lifetime ISA help first-time buyers?
A Lifetime ISA (LISA) lets people aged 18 to 39 save up to GBP 4,000 a year, and the government adds a 25% bonus -- up to GBP 1,000 a year. The full GBP 4,000 sits within the overall GBP 20,000 ISA allowance. You can use the savings plus bonus towards a first home costing up to GBP 450,000, provided the account has been open at least 12 months and you buy with a mortgage. Two first-time buyers can each have a LISA and combine their bonuses, potentially adding GBP 2,000 a year between them towards the deposit.
Is there a penalty for taking money out of a Lifetime ISA?
Yes, unless you use it for a qualifying first home, you reach age 60, or you are terminally ill. Any other withdrawal triggers a 25% government withdrawal charge. Because the charge is 25% of the amount withdrawn -- not just the bonus -- it can claw back more than the bonus you received and leave you with slightly less than you paid in. This is why a LISA suits committed first-home savers or long-term retirement savers, and why you should be confident you will use it for one of the permitted purposes.
What is shared ownership and who is it for?
Shared ownership lets you buy a share of a home -- typically between 25% and 75% -- and pay rent on the remaining share owned by a housing association or provider. You need a mortgage and deposit only on the share you buy, so the upfront cost is much lower than buying outright. It is aimed at people who cannot afford a full purchase, with eligibility usually tied to a household income cap. Over time you can buy further shares (called staircasing), increasing your ownership and reducing the rent until, in many cases, you own the home outright.
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Do first-time buyers pay stamp duty?
In England and Northern Ireland, first-time buyers pay no Stamp Duty Land Tax (SDLT) on the first GBP 300,000 of a property costing up to GBP 500,000, with the standard rates applying to the portion above GBP 300,000 up to GBP 500,000. If the price exceeds GBP 500,000 the relief is lost entirely and normal rates apply. The standard residential rates are 0% to GBP 125,000, 2% to GBP 250,000, 5% to GBP 925,000, 10% to GBP 1.5m and 12% above. Scotland and Wales have their own systems (LBTT and LTT) with different first-time buyer rules.
Can I combine a Lifetime ISA with first-time buyer stamp duty relief?
Yes. The schemes work independently and can be stacked. You can save in a Lifetime ISA and collect the 25% bonus towards your deposit, then claim first-time buyer SDLT relief at completion if you qualify. Note the price limits differ: the LISA can be used on homes up to GBP 450,000, while first-time buyer SDLT relief applies up to GBP 500,000 (with full relief on the first GBP 300,000). Always check both limits against your purchase price, as a home above GBP 450,000 could not use LISA funds without the 25% withdrawal charge.
How much deposit do first-time buyers usually need?
Lenders typically require at least a 5% deposit, and a 10% to 15% deposit usually unlocks better mortgage rates because it lowers the loan-to-value ratio. On a GBP 250,000 home, 5% is GBP 12,500 and 10% is GBP 25,000. Building the deposit is where schemes like the Lifetime ISA help most -- the 25% bonus boosts savings directly. A larger deposit not only improves the rate but also reduces monthly payments and total interest over the life of the mortgage, so saving more before buying can pay off significantly.
What is staircasing in shared ownership?
Staircasing is buying additional shares in your shared-ownership home after the initial purchase. For example, you might start with a 25% share, then later buy another 25% to reach 50%, reducing the rent you pay on the remaining share. Each staircasing transaction is valued at the time, so if the property has risen in value you pay more for the extra share. Many leases allow you to staircase to 100% and own the home outright. Check your lease for the minimum share size, any fees, and whether the maximum is 100%.
Can two people combine first-home schemes?
Yes. Two first-time buyers buying together can each hold a Lifetime ISA and each receive up to GBP 1,000 of bonus a year, combining their savings and bonuses towards one deposit. Both must be genuine first-time buyers for the purchase to qualify for first-time buyer SDLT relief -- if either has previously owned a home, the relief is not available on that purchase. Pooling two LISAs is one of the most effective ways for couples to build a deposit faster, adding up to GBP 2,000 of government bonus between them each year.
Am I still a first-time buyer if I previously owned a home abroad or inherited property?
Generally no. For both the Lifetime ISA property purchase rules and first-time buyer SDLT relief, you must never have owned an interest in a residential property anywhere in the world, including abroad or through inheritance, and this applies to each buyer on a joint purchase. Inheriting or part-owning a property in the past -- even briefly, even overseas -- can disqualify you from the SDLT relief and from using LISA funds without the withdrawal charge, so check your history carefully before relying on either scheme.
Are there other schemes to help first-time buyers besides the LISA, shared ownership and SDLT relief?
Yes. Mortgage guarantee schemes encourage lenders to offer 95% loan-to-value mortgages to buyers with only a 5% deposit, and some new-build developments run their own deposit-support or discount-to-market schemes such as Deposit Unlock or First Homes. Availability, eligibility and terms vary by lender and location and change over time, so check current mortgage products and any local schemes alongside the core LISA, shared ownership and SDLT relief covered in this guide.
Disclaimer: This guide reflects UK first-home schemes for 2026/27as of June 2026. Scheme rules, price caps and SDLT bands can change, and Scotland and Wales have separate property taxes. This is general information, not financial advice. See gov.uk affordable home ownership schemes and gov.uk SDLT rates for the official position.
