The costs of buying  -  Stamp duty

Required Reading


  


The costs of buying - Stamp duty


The next big expense is stamp duty. If you are lucky enough to be buying a property for £125,000 or less, you escape this tax completely. Above this, however, you become liable, on a graduated scale according to the value of the property. Those between £125,000 and £130,000 are subject to duty at the rate of 0.5%, which is payable on the entire purchase price. If the property costs between £130,000 and £135,000, the duty rises to 1% (and, again, you pay 1% of the whole amount, not just on the excess over £130,000). Between £135,000 and £140,000 the rate is 1.5% and above £140,000 it is 2%.

Stamp duty is an unfair tax in many ways: the Government has promised to 'look into it' and one can only hope that, as far as home-buyers are concerned, it will be speedily abolished.

In the meantime, there is only limited scope for manoeuvre. If the property you wish to buy costs £141,000, for example, you will be liable to stamp duty at the rate of 2% on the whole amount, i.e. £1820.

If, however, you can agree with your seller that £11,050 of the price relates to carpets, curtains and other fixtures, then the price of the house falls back within the 1.5% band -and at £139,950 you will be liable to pay just under £1600 in duty-a painless and quite legal way of saving over £1200.


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The costs of buying - Legal costs


The expenses described above valuation and the full survey, if required up before you actually make your move. Meanwhile, you will have other people working for you solicitors they, too, will have to be paid once you have moved in.

Section 9 discusses the arguments for and against doing the conveyancing of your property yourself. Here, however, we have assumed that you do not wish to undertake the conveyancing yourself, but have arranged to have a solicitor to do it for you. You will, in any case, be obliged to pay for the lender's solicitors.

Their fees, again, are on a scale, based on the size of your mortgage. Most solicitors are on the 'panel' accepted by individual building societies and banks; you . . .... see: The costs of buying - Legal costs


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