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Buying in England  - Taxes and likely Costs

                                
On buying

Stamp Duties: stamp duty is a property tax charged at completion. Since April 1st, 2016 new taxation has been put into force to reflect the difference between investors buying holiday homes or buy-to-let and first time buyers.

Stamp duty is payable at each rate on the portion of the purchase price that falls within that band, as follows:


Stamp duty

% on property price
First time buyers

% on property price
Other investors

Up to £125,000

0%

3%

£125,001 - £250,000

2%

5%

£250,001 - £925,000

5%

8%

£925,001 - £1.5 million

10%

13%

Over £1.5 million

12%

15%

Over £500,000 bought by corporate bodies

15%

15%


Land Registry Fee

The Land Registry is a government department, which holds information about all registered properties in England and Wales. It charges a fee for transferring the register to the new owner. This fee is charged according to property price.


Price

Land Registry Fee

Up to £40,000

£40

£40,001 - £70,000

£60

£70,001 - £100,000

£100

£100,001 - £200,000

£200

£200,001 - £500,000

£300

£500,001 - £1million

£500

Over £1million

£800


Solicitors


In the UK the contracts are drafted by the lawyers, and both the seller and the buyer will have a legal representative who will look after his interest.

Some lawyers will charge a fixed fee while others charge a percentage of the property value. Either way you should budget to spend at least £500 on conveyancing fee with a conveyancer and £1,500 with a lawyer, plus costs for the standard searches.

At very competitive rates, the Property Organiser’s team of UK-registered solicitors will be delighted to help.


Survey

It is strongly advised that you have your own independent, more detailed survey carried out to check for any defects. There are three types of survey: the Valuation usually carried out for the bank (if you are applying for a mortgage); the Homebuyer’s Report which costs between £250 and £500; and the more comprehensive Building Survey (Structural Survey) which can cost anything up to £1,000 plus VAT, depending on the value of the house.


On selling

When you sell or dispose of property you might have to pay Capital Gains Tax.

However, if you sell your main home you’re usually entitled to Private Residence Relief on any gain you make which means there’s no tax to pay. However, this only applies to those who are residents at the property.

Generally the properties for which Capital Gains Tax applies include:

- a property that you’ve bought as an investment, for example a buy-to-let property

- a second home, for example a holiday home in the UK

- business premises

- land, such as agricultural land

Rates for 2014/2015 are 18% and 28% for individuals (this depends on the total amount of your taxable income), or 10% for gains qualifying for Entrepreneurs’ Relief.

Since there are other tax reliefs that individuals and companies can apply to, it is advisable to check with an accountant or tax office.

 


 
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