The Real Cost of Moving House – Part Two
Welcome to the second part of our guide to the real cost of moving house, cleverly called ‘The Real Cost of Moving House – Part Two’. In Part One, we looked at the mortgage, conveyancing and the estate agent’s fee. To help you avoid unpleasant financial surprises and to help you prepare for the damage to your bank balance, here are some more (but not necessarily all; every situation is different) of the costs you might need to pay as you buy your home.
Stamp Duty Land Tax (SDLT): You must pay SDLT if you buy a residential property costing over £125,000 in England, Wales or Northern Ireland.
The total value on which you pay (called the ‘consideration’) is usually the price you pay for the property and you pay at different rates on different portions of the property price. Therefore:
- On property costing up to £125,000, no SDLT needs to be paid;
- The next £125,000 (being the portion from £125,001 to £250,000) carries an SDLT rate of 2%;
- The next £675,000 (being the portion from £250,001 to £925,000) carries an SDLT rate of 5%;
- The next £575,000 (being the portion from £925,001 to £1.5m) carries an SDLT rate of 10%, and;
- Any remaining amount (being the portion above £1.5m) carries an SDLT rate of 12%.
If, for example, you are buying a house for £300,000, SDLT is paid at 0% on the first £125,000, at 2% on the next £125,000 (being £2,500) and at 5% on the remaining £50,000 (being £2,500). The total SDLT owed is therefore £5,000.
If you have engaged a solicitor to help you buy your property – and you absolutely should have done, because buying a home without help from an experienced and skilled conveyancing solicitor is extremely risky – your solicitor will ordinarily file your return and pay the tax to HM Revenue & Customs (HMRC) on your behalf on the day of completion. The solicitor will therefore add the cost of SDLT to his or her fee.
‘Search’ Fee: Your solicitor will carry out ‘searches’ (enquiries with authorities) into issues that might affect the property, such as flood risk or planning constraints.
Survey Fee: Paying for a survey of your prospective new property is not essential but is definitely advisable. In short, it’s worth making sure the house you are buying is not about to collapse or cost you a fortune in repair bills. Different types of survey cost different amounts of money, so choose your option sensibly. The ‘bargain’ option might effectively be worthless; if the survey is that cheap, has the surveyor made any investigation at all? If you are buying, for example, a centuries-old farmhouse, you should consider the comparatively high cost of a full structural survey (also known as a building survey), just to be sure those walls and wooden beams are still sturdy. If, however, you are moving into a relatively new house – built after, say, 1980 – a mid-price survey may well be sufficient to bring you peace of mind.
‘Snagging’ Inspection: Talking of modern housing, if you are buying a new-build home, employ a professional ‘snagging’ inspector. (‘Snagging’ is the process of identifying and resolving defects in a building.) Do not assume the property developer has carried out comprehensive snagging. That assumption could be a frustrating and expensive mistake. You have just spent a six- or seven-figure sum on a new home. Why is the paintwork damaged? Why does that door stick? Why don’t the window locks work? Snagging is an all-too-common source of conflict between buyers and property developers. Your conveyancing solicitor will be able to advise you on how best to approach matters around snagging.
We have nearly completed our review of the costs involved in moving home, so look out for ‘The Real Cost of Moving House – Part Three’, coming soon.
If you require property conveyancing when buying or selling a home, Guillaumes solicitors in Surrey are happy to support you. Contact us for more information."