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- 24 August 2018
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.
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 £250.00. Other searches are also required – Water & Drainage, Environmental and, on occasion, Chancel Check searches.
Stamp Duty will more than likely be payable on completion of the purchase. For residential purchases, which will not result in you owning more than one property, the rates are as follows:
|Property or lease premium or transfer value||SDLT rate|
|Up to £125,000||Zero|
|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%|
By way of example, if you buy a house for £275,000, the SDLT you owe is calculated as follows:
Different rates of Stamp Duty will apply in the event that you are purchasing a second property, whether this is a buy to let or if you simply have not sold your first property at the time of completion of the purchase. These rates are calculated on an additional 3% on top of the standard rates noted above.
First-time buyers purchasing a property up to £500,000.00 will not pay stamp duty on the first £300,000.00 and 5% from £300,000.00 – £500,000.00. A first-time buyer is defined as someone who has never owned a freehold or leasehold interest in a dwelling before and who is purchasing their only or main residence. Residential property anywhere in the world is counted when determining whether someone is a first-time buyer. All purchasers in a joint purchase must be first-time buyers to be eligible for the relief.
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.
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.
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 £75.00 – £150.00 plus VAT.
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.
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 £3.00 to £8.00 per title depending on the type of search required.
- 24 August 2018
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