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Guidance Notes

TAYLOR HALDANE BARLEX LLP

GUIDANCE NOTES ON

CONVEYANCING TRANSACTIONS

 

Apart from paying legal fees and Value Added Tax, there are other payments that must be made during the sale, purchase or re-mortgage of a property. These are known as “disbursements” and you will see which ones apply to your transaction from the Estimate provided. 

 

The following list is designed as a guide to help you understand why disbursements have to be paid.

 

The majority are payments made to the Government.

 


Sales and Re-Mortgages

 ¨      If the property is registered at the Land Registry, we need to obtain Register Entries of your title from the District Registry.  These cost between £8.00 and £42.00, depending on what is required.

¨      If alterations have been carried out to your property within the last ten years, we may need to provide your buyer’s solicitors or your new Lender with a copy of the planning permissions and/or building regulations consents.  If copies are not held with your title deeds and you no longer hold copies at home, then the Local Authority can issue copies at a charge.  The charges vary from Council to Council but we will always ask your permission before obtaining them.

 ¨      Most Lenders charge a “Deeds Production Fee” when the title deeds are sent to solicitors.  If the matter does not proceed to completion, the deeds must be returned to the building society or bank. The charge is either payable at that time or it is added to your mortgage account. 

 ¨      If you use the services of an Estate Agent when selling your property, we can discharge the commission account on your behalf on completion provided there are sufficient funds available.  We will always send a copy of the account to you for approval before it is paid.

 ¨      If you are selling a leasehold property - rent, maintenance charges and insurance premiums must be paid up to the date of completion.  If these have not already been paid in advance, a proportion will be required on completion.  A note of these charges will be provided as part of the Completion Statement sent to you after exchange of contracts. Most managing agents and Landlords make a charge for providing leasehold management information that will be required by a buyer’s lawyer.

  

Purchases and Re-Mortgages

 ¨      A Local Authority search is required so that you and your Lender become aware of matters affecting the property. These might include planning proposals; previous alterations that may have been carried out; future road proposals; highway maintenance and enforcement action for breach of planning control.  The search fees vary depending on the Local Authority involved.  It appears that, the nearer to Central London the property is, the higher the search fee is.  The fees can range from £85.00 to £200.00. Other searches are also required – drainage, environmental & Chancel Check searches.

Stamp Duty Land Tax is payable to the Inland Revenue on both freehold and leasehold properties valued at over £125,000.00. It is currently:-

1% of the value of the property up to £250,000.00;

3% of the value of the property between £250,000.01 and £500,000.00;

4% of the value of the property between £500,000.00 and £1 million;

5% of the value of the property between £1 million and £2 million; and

7%  of the value of the property over £2 million.

 

Transfer of Equity - Stamp Duty may be payable where a party is to be taken off the title deeds or added to the deeds when there is a mortgage already secured against the property. Please contact the Conveyancing Office for further details.

Stamp Duty is not payable in connection with property transfers pursuant to divorce or the dissolution of a Civil Partnership as these are exempt under the Finance Act 2003 and the Civil Partnership Act 2004.

Budget 2012: Stamp Duty Land Tax changes from midnight on 21 March 2012

The two changes to Stamp Duty Land Tax (SDLT) are:

 

1.  A new rate of SDLT for expensive properties bought in Company Names

A new rate of 15 per cent for transactions in residential property where the consideration for the transaction exceeds £2 million. This includes Linked Transactions totalling over £2 million.

The new higher rate applies to residential purchases where the effective date (normally the date of completion) is on or after 22nd March 2012.

 

2. A new rate of SDLT for expensive properties bought by individuals

A new rate of 7 per cent for transactions in residential property where the consideration for the transaction exceeds £2 million. This includes Linked Transactions.

The new higher rate applies to residential purchases where the effective date (normally the date of completion) is on or after 22nd March 2012.

Stamp Duty may also be payable on the rent when the property is Leasehold and a new Lease is being granted.  We will be happy to provide you with a note of the duty payable once we are in receipt of the documentation from your seller’s lawyers.

A Stamp Duty Land Tax form (SDLT1) must be completed and submitted to the Inland Revenue’s Data Capture Unit within 30 days of completion otherwise a penalty will be incurred. We will complete the form on your behalf.

Once the purchase or the re-mortgage has been completed, the transaction must be registered at the Land Registry.  The Land Registry fee payable is based on the purchase price of the property, any annual ground rent (if the property is leasehold and a new lease is being granted) or on the value of the new mortgage if you are re-mortgaging.  The fee scales are subject to change but the current fees are shown below to give you an idea of the charges involved. 

 

Land Registration Fees as from 6th July 2009  (extracts from new Land Registration Fees Order 2009)

Scale 1

- For a Purchase including a mortgage

 

      Value or Amount

                  £

Fee Payable

          £

           0 -       50,000

        50

  50,001 -       80,000

        80

  80,001 -     100,000

      130

100,001 -     200,000

      200

200,001 -     500,000

      280

500,001 -  1,000,000

      550

1,000,001 and over

      920

 

Scale 2

- For a New Mortgage only

 

    Value or Amount

                  £

 Fee Payable

            £

              0   -   100,000

       50

   100,001  -    200,000

       70

   200,001  -    500,000

       90

   500,001  - 1,000,000

     130

1,000,001 and over

     260

 

¨      As in the sale of a leasehold property, rent, maintenance charges and insurance premiums may be payable from the day of completion up to the date they next become due.  You will also have to pay Landlord’s Registration fees under the terms of the Lease.  This notice is required so that the Landlord knows to whom future rent and maintenance charge demands and any Notices should be sent.  The charges vary but are normally between £50.00/£100.00. 

General Charges

¨      Lenders Lawyers Fees

Unlike many firms we do not make an additional charge for acting   on behalf of a building society or bank in relation to their mortgage.  Our charges are fully inclusive of these fees and you will know exactly what you have to pay from the outset.

What’s more, Taylor Haldane Barlex LLP is on the panel for the majority of building societies, banks and other lenders. Therefore, you may    not need to have two separate firms acting for you and your lender which would significantly increase your costs.

¨      Bank Transfer Fee

If you are buying, a charge of £30.00 plus VAT will be made for transferring all the completion monies to your seller’s solicitors on the day of completion.

If you are selling or re-mortgaging and have a mortgage with a lender who requires the redemption monies to be remitted on the same day as completion, a Bank Transfer Fee may be payable.

¨      Bankruptcy and Land Registry Searches and Enquiries

A Bankruptcy Search is necessary if you are obtaining a mortgage to ensure that you are not Bankrupt before entering into a mortgage.  The charge is currently £2.00 per name.  We may need to carry out two of these searches if the first one expires prior to completion.

A Land Registry search is carried out between exchange of contracts and completion and ensures that the title deeds have not changed since the contract documentation was received.  The current charge for this search is £4.00 to £8.00 per title depending on the type of search required. If the property is unregistered, an Index Map Search will be required.   There is a fee of £5.00 for this search.

©Taylor Haldane Barlex LLP March 2012.