After buying a house in the UK, what fees do you have to pay every year during the ownership process?Today let’s talk about the holding costs of buying a house in the UK.
Generally, the houses we buy in the UK are divided into freehold property (Freehold) and leasehold property (Leasehold ), there will be slight differences in holding costs between the two. For example, freehold houses do not need to pay ground rent.Let’s take the most common leasehold property (Leasehold) as an example to take a look at the annual cost of owning a house in the UK.
The cost of holding a rental property in the UK mainly includes: property fees (Service Charge), municipal tax (Council Tax), ground rent (Ground Rent), if it is not self-occupied but rented out If so, there will also be leasing agents charge (Letting Agents Charge) and personal income tax corresponding to the rental income (Individual Income Tax#{ 58}).
Property fee (#{71 }Service Charge）
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This is easy to understand. Just like in China, property fees are mainly used to maintain public areas, building facilities and community management costs.
However, compared with domestic ones, the UK’s property facilities and services will be It is better, so the cost will be relatively higher, usually 3-8 pounds per year/ sq. ft.
# {5}There will also be obvious differences between different cities. Big cities like London will definitely be higher
#{ 24}Ground Rent（Ground Rent)#{35 }
If you are buying a leasehold property, you need to ask the person who owns the permanent property of the house, that is, the landlord (Landlord ) The amount of ground rent paid is related to the property and area. Generally speaking, the ground rent for a one-bedroom apartment in London is 300~400. / year, two-bedroom apartment500~600 pound / In principle, the ground rent is adjusted every ten years. If you want to save this money, buy freehold property (Freehold#{63 }) Be your own house owner"" ~
Municipal Tax (Council Tax#{ 97}）
Municipal tax is levied by local governments Each Council has its own tax rate (adjusted annually) for the local taxes collected. It is generally charged in stages according to the value of the house. The smaller the property area and value, the smaller the tax rate. The lower the municipal tax; the larger the area and the higher the value, the more expensive the municipal tax, usually between 900~3000 <. /p>
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If the house is not occupied by the owner, this expense is generally borne by the tenant.In many casesCouncil Tax can be deducted, for example, if all residents are full-time students or are under age18#{ If you are 22} years old, you can apply to the government for exemption from paying municipal tax.In addition to reductions, council tax also provides discounts for some specific groupsdiscount, such asWaltham Forest Council# {31}Provide 25% discount" for houses occupied by only one adult Single dog discount”.
The specific conditions for municipal tax reduction and exemption in each region can be found on the British government’s website. Lan Shajun recommends that everyone be careful. Check it out.
Lease hosting fee (#{ 73}Letting Agents Charge）
If your house is not used for living in but for renting out, you need to pay the entrusted agency company an annual leasing and hosting service fee. The charging standard is generally the annual rent of the house 12%-20%.
Personal income tax (Individual Income Tax）
#{ 10}If you rent out your house and charge rent, you will need to pay personal income tax at a rate of 20%~45% #{ accordingly. 15}
Although the individual tax rate is indeed high, the levy The part is the net income after deducting ground rent, property fees, loan interest and other expenses. In addition, taxable residents can apply for a tax exemption of 12570 pounds per year. Use it
For overseas buyers investing in the UK, the Chinese and British governments There is a tax agreement between China and the UK. If the source of income is both in China and the UK, then there is no need to worry about double taxation!
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If you need to know more about reasonable tax avoidance methods, you can contact the professional consultants of Lansha Real Estate for details.
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#{ 74 }Other Costs（Other Cost)#{ 85 }
1, house insurance ( Insurance)
#{108 }Although house insurance is not compulsory in the UK, if you need to apply for a loan to buy a house, the lending bank will cover the building insurance in the house insurance ( Building Insurance) As a necessary condition for mortgage loan approval, insurance coverage is guaranteed throughout the loan cycle
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In addition, whether you live in it or rent it out, we recommend that you purchase contents insurance for the house you own (Contents Insurance), unlike construction insurance, which insures the house itself, property insurance mainly protects all the property in the house, such as kitchen and bathroom appliances, furniture, jewelry, etc. Considering the prices in the UK, it is really difficult to In case of damage or theft, insurance can cover a lot of your losses
# {27}2, loan fee (Mortgage Cost ）
If you are buying with a loan If you own a house, then your holding costs will also include the cost of loan repayment. However, we have also introduced that in the UK Buy to Let Mortgage you can choose to only pay interest The repayment method is to repay the principal later (Interest Only), so you don’t have to worry about cash flow pressure.
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The above is an explanation of the holding costs of buying British real estate. If domestic buyers have any questions during the process of purchasing British real estate, they are welcome to consult British Blue Sha Real Estate professional consultants, get professional answers
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