| Price |
Stamp Duty Rate |
|
| £120,000 or less |
No Tax |
|
| £120,001 to £250,000 |
1% of the whole price |
E.g. price £100,000
Stamp Duty payable £1000 |
| £250,001 to £500,000 |
3% of the whole price |
E.g. price £300,000
Stamp Duty payable £9,000 |
| over £500,001 |
4% of the whole price |
E.g. price £600,000
Stamp duty payable £24,000 |
|
Rates of Stamp Duty
For a detailed explanation directly from the Inland revenue
click here: http://www.hmrc.gov.uk/so/current_sdlt_rates.htm
The way stamp duty is calculated on leases is even more complicated. If you are buying an existing lease it's treated in the same way as a freehold property. That is the price paid is all that counts. However, if you are buying a new lease, Stamp Duty is based on the Price paid and on the rent payable under the lease. When we know the terms of the lease we will let you know what the Stamp Duty will be.
Leasehold Stamp Duty
In the meantime if you want more information on how it is calculated
click here: http://www.hmrc.gov.uk/so/duty_index.htm -
As you will see, Stamp Duty is a major expense. Despite that, fees are payable to other government departments as well. The Land Registry is the department which keeps records on who owns which properties. All changes of ownership and all mortgages have to be registered with the Land Registry or the transaction becomes invalid. The Land Registry fee varies depending on the price paid.
E.g. a property bought for £75000 will incur a Land Registry fee of £100 a property bought for £125,00 will incur a Land Registry fee of £200.
Land Registry Fees
For more detailed information on all Land Registry fees
www.landreg.gov.uk/publications
Local Searches
When buying a property, one of the essential checks is to ask the local council if they have done or intend to do anything which might affect the property. For example, whether they have granted or refused any planning permissions or decided to build a major new road nearby. Experience has shown that there are certain questions which should normally be asked. These are set out in a detailed form call "a Local Search". This is sent to the Council which is responsible for the area which covers the property you are buying. Different councils take anything from a week to a month to reply to these and charge different fees. Some as little as £100, others as much as £280. As this is quite a big outlay we ask you to let us have a cheque to cover the likely cost. In most of London this is about £300 so that's the amount we request you send us. As soon as we receive that from you we send off the local search. To avoid delay later on we ask you to let us have a cheque for £300 payable to Sayer Moore & Co right at the beginning of the transaction. If the cost of the search is less, we will credit any balance towards your purchase. If it's more, we will ask you for the balance later on.
Solicitors fees for buying or selling
We believe that the fairest way to work out our charge to you is to link it to the amount of time we spend on your case. If your case is simple and quickly dealt with, you pay less than if it is difficult and slow. This is very similar to the way you pay more for a long taxi journey than a short one.
We work out how much to charge for our time by adding up the cost of running our office for one full year. This includes the wages we pay to secretaries, bookkeepers, filing clerks and our support staff, the money we pay to our suppliers for equipment, stationery, electricity, business rates and all the other bills that come in. We then divide that amount by the number of hours our solicitors can reasonably be expected to work in a year, taking into account the normal holiday entitlement, sick leave and the time they to spend on administration, training & other similar requirements. This arrives at the amount each solicitor has to earn an hour to ensure we can pay our bills and stay in business. Finally, we add to that a profit margin of 15% from which the solicitors themselves are paid.
The current hourly charge works out to approximately £125.00. To simplify our sums, the Law Society allows us to assume that a basic letter received or sent or a telephone call received or made would take up about six minutes or one-tenth of an hour. This covers the cost of getting a file out, thinking about what needs to be done, making a note and, if necessary, dictating, typing a letter, checking, signing it and posting it.
We can't give a precise figure for our charges as each case can be different. Some run very smoothly and the clients are content to leave us to get on with things. Others run into all kinds of unexpected problems, usually due to one or more of the people in the "chain" having mislead their buyer or seller or having some unexpected personal problems. In addition, some clients like us to be in contact with them two or three times a day, every day. While we are willing to provide whatever service clients want, that does put the bill up considerably!
The best we can say is that a normal, straightforward purchase or sale would cost around £600 plus VAT...but life and human nature being what it is, cases are rarely completely normal and straightforard.
What we do promise is that we will provide a good, reliable professional service. We keep our clients informed about what we are doing and why. We treat every one of our clients as an individual and treat them with the respect and courtesy they deserve. We think that's real value for money.
Survey
Buying a property is the biggest financial transaction of most peoples lives. It pays to play it safe and have the property thoroughly checked over by a surveyor. If no problems are found at least you can sleep easily. If any serious faults are discovered you can either renegotiate the price to cover the cost or withdraw from the deal. If there are serious faults and the surveyor misses them, you have some chance of claiming compensation.
What is the likely cost? All mortgage lenders will want a surveyor chosen by them to value the property and most will make you pay the valuer's fee. This varies from lender to lender and on the type and price of the property but will probably be between £150 and £250. Please check with your lender for precise costs. A basic valuation is designed to protect the lender NOT you. It's only intended to make sure their loan is reasonably safe.
Some lenders offer to allow their surveyor to do a report for you as well. They charge an extra fee for this, perhaps £300 to £400, but it is worth it to give you the protection you need. Remember though that even the best of surveys usually contain a large number of "get out clauses". Watch out for the surveyor saying he/she was unable to check the roof, couldn't take up the carpets to check the floor boards or didn't check the wiring, gas supply, heating or drainage. Some of these may be reasonable, too many of them and you may begin to wonder what you are getting for your money. If you believe the surveyor is acting unfairly in excluding too many responsibilities discuss it with him/her.
Occasionally you will be offered a full structural report. This is an extremely thorough report going into much more detail than a normal survey. It is really designed for properties where there is a high risk of a serious problem. Older, poorly maintained properties or ones of an unusual design. The cost of these can be high. £500+ but if you need it they are worth it.
Most lenders will let you use a surveyor of your own choice to carry out your survey and their valuation provided the surveyor is on a list of ones they are willing to use.
The Royal Institution of Chartered Surveyors.
For more information about surveyors and how to find one in your area
click here: www.rics.org.uk
Mortgages
are legally binding loan agreements which have to be registered at the Land Registry. See above. Because they are designed to protect the lender and make sure they get their money back should you be unable to repay the loan, the lender wants to be certain they are legally watertight. For that reason they will use a lawyer to look after their interests. Usually they are willing to use the same solicitor as you as this cuts down on the duplication of work. We act for all the major lenders. Your mortgage offer will almost certainly contain a condition that you pay the cost of the legal work involved in looking after the lender. How much this will be depends a little on the lender involved and the size of the loan but guidelines agreed between the major lenders and the Law Society put the legal costs for most mortgages at around £150 to £400 plus VAT.
FT your Money
For independent guidance on mortgages
click here: www.ftyourmoney.com/products/mortgages/mortgage_intro.jsp
What else?
In some purchases there are a few unexpected costs. Sometimes the seller's solicitors fail to supply us with all the information we need to safeguard you or satisfy your mortgage lender. If so, we will press them for that information but there may come a time when it seems prudent to go directly to the land registry, local council or freeholder to get it ourselves rather than risk slowing down the transaction unnecessarily. If we feel we have to make payments to any one else in order to get the information we need to allow your purchase to proceed we will let you know in advance and ask you to cover the cost. Let me stress…these will be payments demanded by other people or organisations not fees kept by us.
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