Update: this blog has now been updated, and you can view it here.
Clue; Not on Conveyancing Fees!
People often say their solicitors fees were thousands and
thousands of pounds.
What they really mean is that the overall cost of moving was thousands and thousands of pounds which included their Solicitors fees.
Different thing entirely.
Do you actually know what proportion of the overall legal costs of purchasing a house in the UK goes to your Conveyancing Solicitor?
You may be surprised.
Say you were buying at £350,000.
OK that’s a bit above the average but by no means in the realms of the super rich.
The answer and at the risk of exploding an urban myth is approximately 5-6% of the total legal costs of buying a property goes on your Conveyancing solicitor’s fees.
I am afraid there are no prizes for guessing where the rest goes?
Tax Tax Tax
A whopping 90% to the government in Stamp Duty Land Tax and VAT, with a further 2 and a bit % to another Government Department, the Land Registry.
It is incredible that out of a total cost of approximately £11500 that just under £10600 goes on Stamp Duty Land Tax and VAT.
The rest of the Conveyancing fees are made up of search fees, online money laundering checks and bank transfer fees.
What is Stamp Duty Land Tax anyway?
Its name was changed by the then Chancellor Gordon Brown a few years back. It was one of his tax changes that didn’t quite
make his budget speech, but turned up in the small print later.
It is in fact a new tax and different to the old Stamp Duty.
Originally, Stamp Duty was levied in the late 17th Century to build up the war chest for a war against France.
I wonder where we are at with that one?
How much is Stamp Duty?
No Stamp Duty Land Tax is payable on property up to £125,000, but kicks in at just a pound over that figure and then on the whole amount with no tapering provisions.
The Tax you will pay will be:
(Please note, these figures have since changed. For our most up-to-date blog, click here).
*1% up to £250000.
*Over £250001 and up to £500000 you pay 3%
*4% above that up to £1,000,000
* and for those of you lucky enough to buy a property over £1,000,000, you will pay 5%.
* And whoa!! since the Budget 2012 a whopping 7% for properties over £2 million.
So, a heads up for you next time you are "down the pub or in the supermarket in conversation with someone who has just purchased a property.
Don't believe a word of it when the legal fees were thousands of pounds.
You know where the money really went!
This Blog has been adapted from our home buying and selling guide "Don't even think about buying or selling your home until you've read this book -it will save you time & could save you thousands" deals with what type of surveys are available and a cautionary tale to boot.
We have used all our experience as top notch, quality solicitors in Chipping Sodbury, Bristol to bring to you a definitive guide to buying and selling your home.
Over the next month post or so we will post a Chapter from the book every other day.
But, if you can't bear the suspense, follow the link below and receive a complimentary copy.