Recently, we have received many questions from domestic buyers who are interested in purchasing British real estate about the costs and fees of purchasing British real estate.Lan Shajun will bring you all-round practical answers in this article.
House price and payment method
After domestic buyers choose their favorite property, they first need to pay a deposit. The deposit will fluctuate depending on the developer and the value of the house. , usually between £2,000-5,000.
After paying the deposit, we need to pay a down payment, which will be the largest expenditure when buying a new house (off-plan). The down payment amount fluctuates depending on the developer, but it is generally 10% of the house price- between 20%.
Some developers will require another 10% to be paid between 6 months to 1 year or 1 year after signing the contract, and the remaining amount will be paid when the house is delivered. In short, the payment ratio varies from project to project.
House purchase fees
Stamp duty
Stamp duty is a component of the purchase of UK property. An important expenditure, the UK real estate transaction stamp duty is borne by the buyer and handed over to the government through a lawyer. After paying the stamp duty, the real estate transaction can be completed and registered.
When purchasing your first self-occupied house, and the house price is less than 625,000:
For properties ranging from 0 to 425,000, the stamp tax rate is 0%;
#{ 23} For the property value of RMB 425,000 to RMB 625,000, the stamp tax rate is 5%.When buying your first house and the price is higher than 625,000:
For properties between 0 and 250,000, the stamp tax rate is 0%;
The stamp tax rate is 5% for the real estate value of RMB 250,000 to RMB 925,000;
The stamp tax rate is 10% for the property value of RMB 92.5-1.5 million;
The stamp tax rate is 12% for the property value above RMB 1.5 million.
When buying a house that is not your first home and the house price is higher than 625,000:
For properties between 0 and 250,000, the stamp tax rate The stamp tax rate is 3%;
The stamp tax rate is 8% for the real estate amount between 250,000 and 925,000;
The real estate amount between 925,000 and 1.5 million. For some properties, the stamp tax rate is 13%;
For the portion of the property worth more than 1.5 million, the stamp tax rate is 15%.
The above tax rates are new policies in September 2022, and some policies will only last until March 2025.
Land title registration fee
After the house purchase transaction is completed, the buyer’s lawyer needs to help the buyer apply for land title registration at the British Real Estate Registration Office Upon completion of registration, the amount of this fee varies with the value of the property. The higher the property price, the higher the fee.
Overseas Buyer's Tax
When a buyer purchases a British property, if he or she has lived in the UK for less than 183 days in the year before the transaction is completed, he or she must pay a 2% overseas buyer's tax. , you can get a tax refund if you live in the UK for 183 days within one year after purchasing the property.
Bank loan fees
The following bank loan fees are generally required, not mandatory fees, and vary by loan product and lender.
Arrangement Fee/Product Fee Bank product fees: Bank product fees vary greatly depending on the bank, loan type and home buyer status (overseas customers or local British customers).
This fee can be paid when applying for a loan, or it can be included in the loan bill after the loan is approved. It can also be deducted when the loan funds are released in one go.
Booking Fee/Application Fee application fee: This fee is usually charged when the bank provides a more favorable loan package, such as Discountmortgage discount loan, Fixed Rate mortgage fixed rate loan or Trackermortgage tracking loan, etc. #{0 }
Valuation Fee: The bank will evaluate the value of the loan property to determine the loan amount. Some banks will not charge this fee.
Found Release Fee The lender will issue the loan. Fees, Fund Transfer Fee, Loan inter-bank transfer fee & Lender Conveyancing Fee, Lender’s legal affairs fee: paid when the loan is issued. Some banks will deduct this fee from the loan amount, some will be paid by a lawyer, and some banks will not. The above fees are charged.
Account Fee/Redemption Fee Loan settlement account management fee: paid when the loan is issued, some banks will charge it when the loan is paid off, some will be paid by lawyers, and some will Banks do not charge the above fees.
Higher Lending Charge High loan ratio protection fee: Some loan banks that exceed a certain LTV ratio may charge this amount to purchase protection against the borrower's overdue repayment. Risk insurance.
Additional non-essential expenses
Home insurance
There are two types of home insurance in the UK: Buildings Insurance Building Insurance & Contents Insurance Contents Insurance When buying a new home, buyers generally do not need to purchase additional insurance. The developer will provide the buyer with 10-year insurance from NHBC Buildmark, the British National Building Council. , this insurance is very necessary for home loans and mortgage resales.
Generally, banks will require you to purchase construction insurance when taking out a bank loan, because it can protect some areas that NHBCBuildmark does not cover. .
Banks do not force buyers to purchase property insurance. When purchasing a new home, developers generally provide property insurance within a certain period. Property insurance usually includes all the things you can think of. Property value appraisal fee
Property value appraisal fee
28}This fee is generally a fee that needs to be paid when buying a second-hand house. Buyers can choose to conduct different levels of value assessment on the property according to different situations. This assessment must be carried out by RICS - Royal Charter in the UK. Conducted by Chartered Surveyors registered with the Institute of Surveyors.
The fees vary according to the level and level of assessment. There are usually three levels, and the fees range from a few hundred pounds to several thousand pounds.
The three levels are Mortgage Valuation, Homebuyer's Survey and Valuation, which targets properties with traditional common structures and building materials and reasonable indoor and outdoor conditions and conditions, & The Building Survey, which targets properties that are large and have been built for a long time. Special properties and properties with major renovation plans.
