The additional costs of buying

Once all of the legal work has taken place, the completion statement will be issued showing the remaining costs that need to be paid. These will include:

The deposit:

This is normally at least 5% of the purchase price.

Stamp Duty Land Tax (SDLT)

You must pay this if you are buying a residential property in England, Wales and Northern Ireland, that is valued over £125,000. If the property is your only property and costs less than £125000 there is no charge.  It is paid in bands as the property price increases:

 Property Price  Stamp Duty
The first £125,000 0%
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

If you are buying second or additional properties you will need to pay an additional amount of 3% of the property’s value, in addition to the normal stamp duty.

In Scotland, the tax is similar and called Land and Buildings Transaction Tax (LBTT).  The structure is similar but the rates applied slightly differently:

 Property Price  Stamp Duty
The first £145,000 0%
The next £105,000 (the portion from £145,001 to £250,000) 2%
The next £75,000 (the portion from £250,001 to £325,000) 5%
The next £125,000 (the portion from £325,001 to £500,000) 10%
The remaining amount (the portion above £500,000) 12%

There is also LBTT Additional Dwelling Supplement (ADS), which is the same additional 3% surcharge when buying second or additional properties.

Pro-rated leasehold charges

The service charges and ground rent due for leasehold properties are often paid annually or every six months. If the seller has already paid for a period when you will be the owner, you will need to reimburse them the amounts that have already been paid.

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Engrossment Fee

This is payable for new build properties and is a fee payable to the developer’s conveyancer for preparing and supplying the legal documentation for signature. The fee varies depending on the developer but is typically £120 – £150.

Land Registration Fee

This is the amount you need to pay to the land register in order to register the property in your name. There is a table of charges depending on when and how the registration is made but the maximum current charges are:

 Property Price Fee
0 to £80,000 £40
£80,001 to £100,000 £80
£100,001 to £200,000 £190
£200,001 to £500,000 £270
£500,001 to £1,000,000 £540
£1,000,001 and over £910

Transfer of Money Fee

This is usually a flat fee charged to transfer the money during the transaction as it is usually sent be CHAPs transfer

Finally, other costs which you may want to consider are:

  • Life Insurance: It may be a requirement of your mortgage, but if not it is still worth considering as it will cover the cost of the outstanding mortgage if you were to die.
  • Buildings Insurance: this will be required if you are purchasing your property freehold and will be a condition of the mortgage. If you are purchasing the property leasehold, the property is normally insured by the freeholder and you contribute towards the cost
  • Removals costs — Unless you are travelling light, it is likely you will need to get professional movers in. Get quotes from a removal firm that’s a member of The British Association of Removers.
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