Stamp Duty Rates

As seen...

Our company has been given a positive write-up in The Times newspaper and has featured on the BBC Business home page.

New Laws To Avoid Stamp Duty

05 October 2011

If you are in the market to purchase residential or commercial property worth more than £250,000, you should consult a Stamp Duty Rates Mitigation specialist who can help you to avoid stamp duty rates. Although these laws took effect in 2008, regular conveyancers often do not know how to use these special tax planning techniques, thus you will likely not be presented with this option. With proper planning, you can save as much as £4,000 in Stamp Duty rates on a property worth £250,000, and with a £500,000 property purchase you could save even more. A £1,000,000 purchase can usually save over £20,000 in stamp duty rates.

It is essential that the purchase has not yet occurred, and preferential that an offer has not yet been presented. The tax laws allow structuring the deal so that chattels can be included or excluded in your offer, depending on the situation and savings. First time home buyers can also save more than in the past by placing the property under the most preferential name for stamp duty rates treatment.

There are several techniques which can be used by individuals, partnerships, and limited companies. You will not need to establish an offshore company, and full disclosure will be provided to both the land registry and to HMRC. Your choice of mortgage providers will not likely be affected since the use of these techniques is accepted by Council of Mortgage Lenders.

The new laws also make certain types of property eligible for tax reduction or elimination. The United Kingdom government has recognized the importance of protecting the environment and has provided tax preference to encourage citizens to purchase carbon neutral homes. Property that can be proven to be 100% carbon free, as certified by a government recognized authorized assessor, and is priced below £500,000 can totally avoid paying stamp duty rates .

Properties that are qualified as right to buy schemes are exempt from stamp duty rates. These are usually properties that have been rented from a local housing authority or other public sector body. Properties located in a redevelopment zone can qualify for reduced or eliminated SDLT.

Stamp Duty Land Tax Avoidance

04 October 2011

Stamp duty Rates in the United Kingdom is a tax imposed on the sales of both residential and commercial real properties, also commonly called as Stamp Duty Land Tax (SDLT). Stamp duty rates mitigation on the other hand is more commonly known as SDLT planning or scheme. While this is 100% legal it is important to know that it may not be for everyone.

Stamp Duty rates planning is a legal means of minimizing tax charges for property sales. It is therefore a form of tax-avoidance, however must be distinguished from tax evasion, which is completely illegal. However to effectively avoid tax, financial advisers are necessary. These are accountants who specialize on taxation, and are knowledgeable on various techniques and schemes of tax avoidance. Companies who offer these kinds of services are often called conveyance solicitors.

Real property transactions are taxed according to different rate bands. For below £125,000 purchases, they are not charged with stamp duty. Above £125,000 and below £250,000 purchases have 1% stamp duty rate. Other band rates are between £250,000 and £500,000; between £250,000 and £500,000 and above £1,000,000 having stamp duty rates of 3%, 4% and 5% respectively. SDLT mitigation can be applied in any band of stamp duty rates however can be more efficient in higher band of stamp duty rates.

Stamp duty mitigation however may have drawbacks depending on the adviser or accountant to enlist. Generally these conveyance solicitors may not explicitly discuss risk in order to attract buyers of any SDLT planning scheme. It is the imperative to the buyer or seller or the real property to ask them for details regarding risks on enrolling in such schemes. This risk includes various legal charges from the HRMC (Her Majesty’s Revenue and Customs) authorities. The HRMC have up to nine months to do an inquiry of the SDLT form applied. This may rise from fees and taxes avoided by the scheme in a wrong way. This means that the stamp duty rates mitigation process may have succeeded conditionally. Upon failing on the conditions set by the HRMC the buyer may end up paying the actual tax, interests and the fees paid to the scheme vendor altogether.

Since stamp duty rates mitigation can lower the amount of tax to be paid, it can be said to have a positive effect on the buyer of the scheme. However, corresponding risks must also be considered like the fees charged by the solicitors and other legal constraints that may arise.

SDLT Mitigation

04 October 2011

Property purchasers in the United Kingdom are required to pay Stamp Duty Land Tax (SDLT), but educated consumers can learn how to avoid stamp duty rates.

If your purchase is going to be over £250,000, you could save almost £4000 in Stamp Duty rates at closing. If your purchase is going to be over £500,000, you could typically save over £11,000 in Stamp Duty rates, with a £1,000,000 purchase saving over £20,000.

The UK Government has recognized the need to assist first time home buyers, so has made it possible to avoid or minimize this expensive tax. The property will need to be listed under the correct person's name in order to qualify. Properties under £125,000 and first time home buyers do not incur SDLT.

Before presenting your initial offer, it would be beneficial to consult a stamp duty rates mitigation specialist to see how to structure the offer in order to reduce or avoid this tax. In certain situations, the inclusion or exclusion chattels can significantly affect the tax burden.

The use of these 100% legal tax planning strategies is recognized by the Council of Mortgage Lenders, so your mortgage finance company choices should not be limited. The land registry and HMRC are both notified, and under most circumstances, the time frame and purchasing process will not be affected.

Whether the purchase is for an individual, a partnership, or a limited company, these techniques to eliminate stamp duty rates are legal for both residential and commercial properties. This will not necessitate establishing an offshore company.

Other property purchases that are given preferential treatment include carbon neutral homes. To qualify as carbon neutral, a property must be inspected by a government recognized assessor and ascertained to be 100% carbon free. Such properties are excluded from stamp duty.

Other properties that qualify for reduced or eliminated stamp duty rates include properties that were once rented as public housing or other types of public sector body properties. These are referred to as right to buy schemes. Properties located in a redevelopment zone also qualify for preferential tax treatment.

It may not always be possible to totally eliminate stamp duty rates, but the savings can be significant, so talk to an adviser today.

Stamp Duty Rates Relief

03 October 2011

Property purchasers in the United Kingdom can significantly reduce or avoid stamp duty rates by learning how the 2008 laws apply to them. Recognizing the need to aid first time home buyers, the UK government has allowed property purchases under £125,000 and first time home buyers to avoid this tax. The property must be listed under the first time home buyer's name in order to qualify.

To qualify, the purchase must not have already occurred. Your stamp duty rates mitigation specialist may also be able to help you structure your initial offer to exclude chattels to lessen your tax burden. So please consult a specialist before making an offer.

Stamp duty is the percentage of the purchase price of the property. For a property worth £125,000 to £250,000, Stamp Duty rates are 1%. 3% Stamp Duty rates is levied for properties between £250,000 and £500,000. That rate goes up to 4% for properties valued at £500,000 to £1,000,000. The stamp duty rates levels out at 5% for over £1,000,000. You could save almost £4,000 for a £250,000 property, over £8,000 for a £500,000 purchase, and over £23,000 for a £1,000,000 purchase.

It is legal to use these techniques to buy residential or commercial properties whether you are an individual, limited company, or partnership without establishing an offshore company. These laws are consistent with the Council of Mortgage Lenders, the land registry, and HMRC rules. These are specialized tax planning techniques, so your regular conveyancer most likely will not inform you of these options.

The UK government has also recognized the need to encourage property owners to protect the environment. For a home that can be certified by an government recognized assessor as 100% carbon free, there are no stamp duty rates.

Certain other properties including right to buy schemes receive preferential tax treatment. These are typically properties that were rented as public housing or other properties recognized as being owned by a public sector body. A property located in a redevelopment zone can qualify for reduced or eliminated SDLT. It is not always possible to completely avoid SDLT, but with closing costs being so high, mitigating these taxes is beneficial.

What You Need To Know About Stamp Duty Rates Mitigation

02 October 2011

Are you familiar with stamp duty rates mitigation? Below is its basic definition, its legality in the UK, and information on how you can choose a good plan for SDLT mitigation if it's something applicable to you.

What is Stamp Duty Mitigation?

Before knowing how to mitigate stamp duties, you should learn about the tax associated with it, the SDLT or the Stamp Duty Land Tax, a tax you pay when you purchase property in the United Kingdom. Stamp duty mitigation is an approach to work around SDLT. In the UK, commercial or residential properties and land acquisitions are subject to the SDLT. Any land or property purchase made that has a value of over £250,000 is charged with the Stamp Duty rates. If you purchased the land or property as an investment, this tax has a huge impact on your investment. Instead of it being profitable, the tax charged becomes a hindrance.

How Do You Avoid Stamp Duty Rates?

You can work around having to pay the SDLT. Yes, it can be done legally -- and the process is called stamp duty mitigation. This approach can mitigate almost 100% of the SDLT, although you should choose a good plan to achieve such goals. One example of how stamp duty mitigation works is by buying property that has zero carbon production. If you have a carbon neutral home, you eliminate having to pay the SDLT.

Choosing a Good Plan for Stamp Duty Mitigation

Don't mistake stamp duty mitigation as a form of tax evasion. Sure, you're looking for a way to not pay the SDLT, but it can be done legally. Whether it's a commercial or residential property that you're making, you can take advantage of stamp duty mitigation.

Choose a stamp duty rates mitigation program that's been running for a long period -- with proven results. You don’t want to be charged with tax evasion cases especially if you're investing in real estate properties for a living.

The stamp duty rates scheme should comply with the legal requirements for tax planning, while offering significant tax savings for you as a consumer.

Choose a SDLT mitigation scheme that's low-risk, non-aggressive, and completely legal.

To be on the safe side, hire a legal counsel if you're looking for stamp duty rates schemes. There are ins and outs to the legal system that you may not necessarily be familiar with. Having legal counsel can ensure you're taking the right path in mitigating the stamp duty rates you would be charged with.

Stamp Duty Rates In The UK

25 September 2011

When purchasing any land or property in the United Kingdom of over £125,000 pound a tax is charged - and you're going to have to pay up unless you appoint a specialist tax planner. This tax is called Stamp Duty Land Tax or (SDLT) and the good news is that this tax is not a set rate and is applied at different rates and thresholds. In this article we will be looking at the different stamp duty rates and how they vary according to residential or non-residential property or whether the property is freehold or leasehold. So let's take a look at the rates and figure out what you'll be paying.

Stamp Duty Rates If You're Planning On a Residential Property

The good news here is that you don't have to start paying anything until you buy a property of over £125,000. Then that price until £250,000 you will be taxed stamp duty rates of only 1% and from £250,000 to £500,000 you will be taxed 3%. It doesn't end there though, for £500,000 you will get taxed stamp duty rates of 4% and then 5% for anything over £1million. That is pretty much it in a nutshell. The only exception to this rule is for first time buyers purchasing a home from £125,000 to £250,000 at which you will be paying nothing. This is done mostly to encourage and help first time property owners. Also note that if you're purchasing a new lease that you might be getting charged more than the previous rates that I mentioned, but only if you're getting a highly expensive lease. There is also a 'disadvantaged' residential category that the government adds, however the same rate as above applies.

Stamp Duty Rates If You're Going Non-Residential

This category is slightly different and more expensive. This is of course reasonable since you will be most likely renting it out and hence the government will tax you more. For these stamp duty rates it starts from the category of up to £150,000 and a rate of zero percent applies only if the annual rent is less than £1000 and 1% if the annual rent is more than that. The next category is £150,000 to £250,000 which is also 1% and then £250,000 to £500,000 which is 3% and then over that amount for a tax of 4%. So as you can see these are a little bit more expensive.

In the end, I hope you got more informed about stamp duty rates and where they apply. So make sure you keep these in mind the next time your purchase a land or property and keep them within you budget.

Stamp Duty Rates Can Be Avoided

22 September 2011

Stamp duty rates are a fee levied by Land Registry towards all acquisitions on UK property. It's a legal obligation that the customer gives the duty on any real estate unless they're confirmed to be exempt. Exemption can be challenging to establish but there are numerous of ways when you could avoid these expenses altogether or, at the minimum, pay a less amount.

First time customers also obtain a higher limit. They're entitled to invest in a house with a valuation of up to £250,000 avoiding the stamp duty rates expenses. If two individuals are buying the property or home together, then both sides must be new buyers so neither of them must have bought a home previously.

Establish that the house you obtain has zero co2 emissions or you could produce your own electric power for twelve months and you can avoid stamp duty rates permanently if the house was bought at under £500,000. In the event the property costs more than this you will get a refund of £15,000.

Stamp Duty Mitigation

19 September 2011

When buying property in the United Kingdom, most people dread the Stamp Duty Land Tax (SDLT) as it can extremely expensive. The good news is that there are ways to avoid paying this excessive tax altogether. By speaking with a qualified tax accountant you can save several thousand pounds. The amount of money you can save with stamp duty rates mitigation depends on a number of factors.

First and foremost, the purchase price of the property you are buying plays a huge role in both the tax owed and how much you can potentially save. For example, if you are purchasing a property for £250,000, you can often save around £4,000 in tax. That amount increases substantially for higher priced properties. For a property purchased for £1,000,000, some buyers are able to save as much as £20,000 - £25,000 by avoiding stamp duty rates. This is a considerable amount of money that could be put to better use - such as a new car or by treating yourself to a complete home redecoration.

The second major factor is making sure that you find the right tax adviser. The more knowledgeable they are about the specific tax laws in the UK, the most they will be able to help you save. Generally speaking, a regular conveyancer does not have adequate knowledge to be able to help you save money on stamp duty rates and therefore often do not even present their clients with SDLT mitigation as an option. At Stamp Duty Rates we are trying our best to educate people that stamp duty rates are not inevitable and that there are perfectly legal ways it can be avoided.

If you are considering the purchase of property worth over £250,000, finding an SDLT expert to assist you with the purchase can easily save you thousands of pounds by helping you avoid paying stamp duty rates. Keep in mind that the help of tax advisors is not free; they typically charge clients a percentage of the total amount they were able to help the client save. The actual percentage varies a bit from one company to another so be sure to ask them the specifics of their fee structure. Also be sure that the ways in which they help you avoid stamp duty rates are 100% legal.

At Stamp Duty Rates we work with leading UK tax experts that have a track record of successfully saving clients on their tax liability. To speak with a qualified professional simply complete our simple online form and a specialist will call you back.

Stamp Duty rates are expensive but can be avoided

18 September 2011

If you live in the UK, you may be able to avoid stamp duty land tax (SDLT) on your next property purchase. Stamp duty mitigation may be able to drastically reduce or eliminate the amount of SDLT you owe. The specific amount you can save through stamp duty avoidance depends on a number of factors but some people are able to save thousands of pounds on a single property purchase. For buyers purchasing property worth over 1 million pounds, they are sometimes able to save as much as 25,000 pounds on the purchase of the property! Clearly, SDLT mitigation is worth a try.

Not all properties qualify for SDLT mitigation, but there are tax experts available who can help folks determine if there are any ways for them to reduce or totally avoid stamp duty. For first time home buyers, they may be able to completely avoid stamp duty rates for properties purchased before March 2012. Additionally, there are thresholds based on the purchase price of the home which determine how much SDLT a buyer is subject to, based upon a percentage of the worth of the property.

Be forewarned that a common way of lowering or eliminating stamp duty rates is to claim more for fittings and fixtures than was actually paid in order to get the purchase price of a property under one of the thresholds. This is not a valid way to avoid stamp duty and if you are determined to have done this, you may be subject to penalties.

When it comes to SDLT, the best way to try to avoid it is to talk to a tax professional. They know the intricate ins and outs of stamp duty rates and they can help people purchasing property to stay on the legal side of tax avoidance.

Potential Stamp Duty exemptions include purchasing property in a redeveloped area, property which has zero carbon emissions, property which is self-sufficient (energy wise), and more. When it comes to “green” exemptions such as zero carbon footprint and self-sufficiency, the burden of proof is clearly in the hands of the purchaser. A stamp duty rates expert can help people navigate the difficult paperwork involved in proving eligibility for a SDLT exemption.

Stamp Duty Mitigation tax professionals generally charge a fee based on a percentage of the total amount of stamp duty rates avoidance. For example, if they are able to save a customer 5000 pounds in SDLT fees, their fee may be 40%. In this example, that would be 2000 pounds. This may seem steep but given the alternative of actually paying 5000 pounds in stamp duty rates, paying 2000 pounds is clearly a more pleasant alternative.

If you are considering purchasing a private home or a business property in the United Kingdom, and that property is worth close to 250,000 pounds or more, be sure to check into your SDLT Mitigation options before you complete the deal. In today’s tough economic times, avoiding SDLT is a great way to make the most out of your money. Stamp Duty Rates can help, so fill in our contact form today and an adviser will call you back.

Avoid Stamp Duty Rates

16 September 2011

Research has shown that buying a property in England and Wales is becoming progressively more difficult. Prospective house buyers are struggling to buy their first property as mortgages become harder to purchase and prices of housing have remained high despite the recession. The Stamp Duty Land Tax (SDLT) applies on any purchase of property or piece of land in both England and Wales calculated as a percentage on the property price. Different property prices attract different stamp duty rates. Properties ranging between £250,000 and £500,000, £500,000 and £1,000,000 and over 1,000,000 attract 3%, 4% and 5% respectively. With so much focus on getting a mortgage, calculating and then paying your Stamp Duty liability is often overlooked by aspiring home owners.

Through SDLT Mitigation, it is possible to avoid SDLT altogether. The procedure is offered by a number of tax planners in the UK and is tailor made to either reduce or completely do away with the liability of SDLT. In the process this saves the property buyer a large sum of money - thousands of pounds.

The fee for offering this tax advice is charged according to the amount the purchaser is saving from the SDLT. Different companies charge differently but generally they end up taking half of what you have saved on the tax avoided. To attract more customers, some companies offer guarantees and insurance assuring the soundness and legality of the process.

Since SDLT increases in tandem with the value of property, the more expensive the property the proportionally more stamp duty rates you have to pay. Buyers can save around £25,000 when buying a property worth 1,000,000 through SDLT Mitigation. Properties gong for less than £500,000 have a lower savings potential. So whichever way you look at avoiding Stamp Duty rates, the amount to be saved should also be put into consideration.

Individuals, limited companies and partnership purchasers qualify for [Stamp Duty rates] (http://www.stampdutyrates.org.uk "Stamp Duty Rates") Mitigation. The key here is that the purchase must not have completed as there are some critical alterations made to the contracts that each party exchanges. They usually take time assessing your individual situation and recommending workable techniques to avoid Stamp Duty Rates.

Always remember that most mortgage providers do accept the process of Stamp Duty Mitigation. It is not a crime to avoid Stamp Duty Rates as it fully complies with the Council of Lenders Rules and a full disclosure is made to HMRC about the tax planning process.

The Cost Of Mitigating Stamp Duty Rates

12 September 2011

What Is The Cost of Mitigating Stamp Duty Rates?

Stamp duty rates mitigation is a method or strategy used in planning your tax burden in such a way that you pay less or no tax at all whenever you buy real estate or land in the United Kingdom.

Many companies offer this type of tax planning services all over the United Kingdom. Every business prices their services differently, however for the most part the pricing can be expected to be around 50% of the total tax bill saved by the services provided.

Here are some example strategies to show what we mean:

Let's say Customer One is getting ready to buy a £1,000,000 home. At current stamp duty rates, this would be 5% for SDLT, which would be £50,000. An expert at SDLT mitigation strategies, who takes care to eliminate that tax, would be paid £25,000, which would be half of what they saved Customer One.

Customer Two is going for some real estate valued at £750,000. The rate for the stamp duty in this case would be 4%, or £30,000, so the fees payable to the mitigation expert would be £15,000.

There are some stamp duty rates mitigators who would add on more fees to this percentage. If using a fixed fee schedule, the percentage paid is typically lowered. Fixed fees lowers the possible SDLT savings considerably on properties that don't cost as much.

Let's look at some examples in these cases:

The first mitigation company would bill at £4,000 plus 30% of what is saved in stamp duty rates. The second company would not include a fixed rate, but would just apply the 50% of stamp duty rates saved amount.

Customer Three is purchasing a home with a price tag of £300,000, so the SDLT at 3% places a rate of £9,000. Looking at the examples of fee structure above, the first company would send a bill totaling £4,000 for the flat rate, plus 30% of the £9,000 stamp duty rates, or £6,700. The second company would charge only the 50% of the saved £9,000 which would be £4,500. So using the second company would result in a further savings of £2,200 on top of the % savings by not having to pay fixed rate fees. In other words, using companies with fixed rate fees in addition to percentage of saved SDLT is not a good idea if the price of the real estate is low.

One more look. Customer Four is looking into a purchase of real estate priced at £1,000,000, carrying a stamp duty rates of £50,000. The first stamp duty rates mitigation service would bill the £4,000 flat rate, and 30% of the £1,000,000, which runs at £19,000. The second company, with no flat rate fees, would just bill 50% of the savings, or £25,000. In this case, the favorable mitigation company would be the first one, with £6,000 higher savings than the second company. This example explains clearly that the fixed fee mitigation company suffer at high priced real estate sales but shine on the lower priced properties.

It is a case by case situation, to be sure, so speaking to the experts in SDLT mitigation is very important so that you can gain an understanding of how avoiding stamp duty rates can work to keep thousands of pounds in your wallet. Pay close attention to the fees being discussed.

The Truth About Stamp Duty Rates

02 September 2011

Of all the additional costs that go into purchasing land or property in the United Kingdom using a loan, taxes are the largest chunk. Not only are property purchases highly taxed, but so are buying share transfers and stocks.

So many myths permeate stamp duty and stamp duty rates that this site has been created to sort through what is fact and what is fiction.

The stamp duty rates are decided upon by government officials, as illustrated in the rates table, and there really is no escape from them without the use of stamp duty mitigation techniques. This article details all you need to know about stamp duty rates.

These are fixed rates that are due when a piece of property is bought and the deal closed. All of the appropriate stamp duty that apply to the purchase will be drawn out by your solicitor when your bill to them is totaled for the services they have rendered. The question then is what amount will you need to pay?

Rates come in multiply types as shown in the table, but the most common rate that people will find apply to them is the stamp duty land tax, or SDLT, which is levied against residential real estate transactions. Special rates include:

Residential property Stamp Duty Rates

Disadvantaged locations Stamp Duty Rates

New residence leasehold transactions Stamp Duty Rates

Non-residential and mixed purpose real estate Stamp Duty Rates

Shares sales Stamp Duty Rates

Residential Stamp Duty Rates

The SDLT is what most citizens will pay as they purchase someone else's property. The person who buys most often is the one who receives the tax bill through their attorney, however in some cases the seller can elect to cover this cost for you if it is agreed upon in the sales contract. How much of a percentage of the amount paid in SDLT is dependent upon how much the property sells for, and at the moment it is only applied to sales of a property that is greater than £125,000. Below are the stamp duty rates of the SDLT as they currently are assessed:

Up to £125,000 - 0%

Over £125,000 to £250,000 - 1%

Over £250,000 to £500,000 - 3%

Over £500,000 to £1,000,000 - 4%

Over £1,000,000 - 5%

As of March 25 2010 those buying a home for the first time have seen the threshold of the SDLT go up to £250,000. This means that for the buyers of real estate who are getting their first home, they will not be assessed any stamp duty land tax percentage at all. This deal will be done away with at the end of 2011 on December 31.

As of April of 2010 the SDLT for homes costing over £1,000,000 have been assessed a 5% rate.

It is important to note that the rate for stamp duty tax indicated is due on the entire sales amount and not divided up among these percentages. For example, if your property sells for £260,000 then you will have a 3% SDLT assessed on the entire £260,000. The entire breakdown of the stamp duty tax rates and when they start to go into effect.

Stamp Duty Land Tax in Regions That Are Disadvantaged

Stamp duty tax rates for areas that are disadvantaged around the United Kingdom don't differ from the rates shown above with one exception: the percentages begin at £150,000 at 1% instead of the regular £125,000.

Save Money On Stamp Duty Rates

01 September 2011

There are a number of reasons why someone would want to avoid stamp duty rates. Most of the reasons have to do with how high the stamp duty rates can be, and being able to transfer funds to other uses. Therefore, in establishing how to proceed with this method of saving money on Stamp Duty Rates you have to ask yourself first how much you would have to win by following this procedure. There are no ground rules to be followed that establish a singular method but, in any case, the following rules of thumb should get you going in an instant.

There are some people that think those types of practice to fe fraudulent, when, in reality, those are just tax evasion techniques that the law allows, and that are followed by a large mass of the population. Sure, some people will just not have enough information to profit from these types of working around techniques, but, at the end of the day, when you realize how much money can be re-purposed or simply just saved you just cannot go back any more. The risk of losing a good deal of money and the fear that in some time, this will prove detrimental to your business, those things will guide you on the right path to success.

So, basically, stamp duty rates are an altogether avoidable fee, and whenever you employ the use of selling or trying to purchase a property you can definitely save some money on stamp duty rates and it is altogether legal. There are no other rules to follow, but you have to address a lawyer so that he can give you a step by step follow up on how you’ve got to proceed. There are different levels of savings on stamp duty rates, depending on how much the property is worth, therefore, you want the best legal advice you can get to reduce or eliminate stamp duty rates. Make sure you get it right.

Stamp Duty And Other Costs

29 August 2011

One of the aspects of purchasing land or property that blindsides most buyers is all the costs related to buying a house. Not only is there the mortgage itself involved, but there are other costs that need to be paid. We'll go through what those other costs are here in this article. In particular, we are going to go through one of the biggest costs involved, known as the stamp duty rates, and what buyers can do to get out of paying it.

To initiate a mortgage there are going to be at the very least two more costs on top of it. One is what is called the arrangement fee, which is another way of saying the fixed mortgage application fee. The second one is just a basic valuation fee, which can be as much as £100.

After these costs are taken care of by the buyer, they will be moved on to the survey, in the form of the Homebuyer's report or the Building Survey. The cost involved would be based upon which survey is done, but can be expected to run from £250 all the way up to £1000. After these costs are paid, the buyer faces the conveyancing and legal fees. This, of course, depends on which law firm is chosen to handle the transaction. Some companies will charge a fixed fee, while others will base their charges on the sales price of property, up to a half-percent.

Next on the list of costs is the Land Registry fee. This will be anywhere from £40 to £800, depending on how much the property goes for. With an estate agent involved, the cost of the fee for the estate agent will have to be paid by either the seller of the property or the buyer. This would be decided among the two individual parties. Expect the agent fee to run up to 2% of the sales price for the property.

Moving to a new home or property will involve removal fees, and these can run up a bit in cost. Even without the use of a removing company, the van cost will need to be paid. After moving in to the new home, there will be more costs, from decorating the new home, insurance costs, and utility services. Even redirecting the mail will have its costs.

Last of all comes the stamp duty rates. This can be the greatest cost of every fee we've gone over to this point. How much a buyer must pay in stamp duty rates will depend on how much the real estate goes for, as the stamp duty rate will be a percentage of that sales price, going up the higher the price.

Stamp duty rates can be reduced or eliminated when the home price goes above £250,000. This procedure is known as stamp duty rates mitigation and involves different methods using tax planning strategies to either get rid of the stamp duty altogether or at least lower the bite. Some solicitors will provide this service, however not too many people know about it to ask for it. Those offering this service will charge a percentage of how much they save the buyer on the stamp duty rates fees, up to half of the amount saved.

Any cost for property priced at £1,000,000 or greater, the mitigation strategies could reach upwards of £25,000 or more in savings, so pursuing this method is worth the effort involved. For buyers wanting to buy a home worth over £250,000, the next thing they do should be to open the door of a stamp duty rates professional, without waiting any longer.