My two daughters each inherited a share of ownership of three rental properties.

This property was within a simple trust. Today, one of my daughters wants to buy her first house.

Will it be considered a first time buyer for stamp duty purposes?

J Maxwell of Surrey

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“Even being a co-owner of a rental property means you are not a first-time buyer”

Samm Galloway, which one? Money expert, says…

Unfortunately, none of your daughters will be considered first-time buyers when they come to purchase 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 may include property that you inherited or was gifted to you.

As a result, your daughter will pay Stamp Duty Land Duty (SDLT) if she buys a property for more than £250,000 (instead of the £425,000 threshold that currently applies to first-time buyers).

Unfortunately, things could turn out to be even more costly, depending on when your daughter inherits the properties.

She might also end up paying Additional SDLTif his interest in the rental properties is worth more than £40,000. This is charged at the rate of 3% of the total 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 purchasing another property, the inherited property may be disregarded.

Provided that they have become co-owners by inheriting their interests and that their share (and that of their possible spouses/civil partners) does not exceed 50%, as in the case of your daughters.

If the interest in the property was inherited more than three years before the new property was purchased, then it will be considered additional property.

• Learn more: Stamp duty calculator

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