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Purchase of Property
Purchase of Property The main cost of purchasing a property is not the legal fees but all the disbursements associated with the purchase. Hence, we strongly recommend that you read the information provided in this page.
There are standard additional costs that must be paid when purchasing a property. These additional fees cover searches, land registration fees and Stamp Duty Land Tax. Stamp Duty Land Tax is a government tax paid by the purchaser (buyer) and is payable to the Inland Revenue.
Stamp Duty Land Tax and Land Registration Fee (payable to HM Land Registry) will depend on the value of the property purchased.
Stamp Duty Land Tax
The government has designated certain wards where properties to the value of £150,000 will be exempt from stamp duty.
Anyone buying a freehold residential property, costing £150,000 or less, in a qualifying area, can claim Disadvantaged Areas Relief, resulting in a saving of up to £1,500.
You can check whether your property falls within the designated wards by clicking here: http://www.hmrc.gov.uk/so/dar/dar-search.htm.
Following the introduction of the Finance Act 2002 it is now a requirement of the Inland Revenue that a Stamp Duty Land Tax return is completed on every purchase transaction. This is normally the responsibility of the purchaser to complete. For a small fee of £50 we can complete this SDLT return on your behalf. It is entirely up to you.
Land Registry Fees
Land Registry fees are payable to register the property in your name. The Land Registry varies these fees from time to time. However, these are correct at the time of this quotation.
Almost all transactions are subject to registration at the Land Registry.Guide to Land Registry Fees for House Purchase (these fees are current as of July 2009):
On the purchase of a new leasehold property an additional fee may be payable based on the rent. Where the transaction is not a simple purchase e.g. a transfer of equity a separate scale of fees applies.
Local Authority Searches
This is a search of the records of the local authority relating to the property. The cost depends on the local authority concerned but is typically around £130. to £300
This is a list of questions about the property, which are sent to the local authority. It covers such items as whether the road serving the property should be maintained by the council, whether there have been any planning applications on the property, and a number of other things.
The search is against the property only and does not cover the surrounding area. A word of warning - the search will not show any Planning Permissions or matters affecting land or buildings outside the boundaries of the property. It is important that you let us know at the start of the transaction whether you require information on any particular point or whether you wish us to ask any particular questions of the local authority. We would not normally advise a buyer to exchange contracts without a satisfactory local authority search.
It is becoming increasingly common to obtain a drainage search from the water authority and many lenders now require this. The cost depends on the authority, e.g. Thames Water charges £37.50.
Other searches may be necessary depending on the location of the property, e.g. Commons Registration Search in rural areas. In certain geographical areas a coal mining search may be necessary.
In leasehold purchases there is usually a requirement to pay a fee to the landlord/managing agent to register the change of ownership of the buyer and details of any new mortgage with them. The fee payable can vary considerably as it depends on the particular lease (or charging policy of the landlord).
There may be other minor disbursements depending on the particular transaction.
Bank/Telegraphic Transfer Fee (inc VAT) – approximately £35-£40.