Conveyancing Fees: Where Does All The Bloomin' Money Go?
- AuthorPaul Hajek
You may have spoken with or overheard someone saying:
Those bloomin’ conveyancing fees cost us thousands and thousands of pounds.
However, what that bloke or woman down the pub or in the supermarket really meant is that the overall cost of moving home was thousands and thousands of pounds which included their conveyancer’s fees.
A different thing entirely.
What Would You Expect To Pay in Conveyancing Fees When Buying a House?
Say you’re buying a house or flat for £350,000.£350,000.
OK, that’s maybe a bit above the average house price and quite a bit short of any Mansion Tax worries for at least another five years.
When we first published this blog in 2010, Stamp Duty Land Tax ( most people just call it Stamp Duty), Land Registry fees and VAT, plus took over 90% of the total cost of buying a new home.
That was a whopping sum between £10,900 - £11250 straight to the taxman- thank you very much
The rest of fees were made up of Conveyancing fees, search fees, online money laundering checks and bank transfer fees.
Reduced Conveyancing Costs
The good news is that the overall moving costs when you buy your home came down last year.
First up, the Land Registry reduced Land Registry fees for online applications ( make sure you ask your Conveyancer if they send applications electronically) in March 2014.
Then the Chancellor in his Autumn statement recalibrated and by so doing, in most instances, reduced the amount of Stamp Duty on a Purchase
Reduced Land Registry Fees
Here is a table showing the old and new rates
£0 to £50,000
£50,001 to £80,000
£80,001 to £100,000
£100,001 to £200,000
£200,001 to £500,000
£500,001 to £1 million
Over £1 million
Reduced Stamp Duty
The government decided to taper Stamp Duty.
The new rules came into effect on 4th December 2014.
Previously, Stamp Duty was on a slab basis which meant that you only needed to creep into the next band and ended up paying the Stamp Duty on the whole of the Purchase Price – Boo, Hiss!
New Stamp Duty: How is it calculated?
Stamp Duty is still exempt at property up to £125,000 which means there is no Stamp Duty to pay.
However, now you will only pay a tiered rate and not a slab rate of tax.
The new Stamp Duty Land Tax bands are;
0% up to £125,000
2% between £125,001 and £250,000
5% between £250,001 and £925,000
10% between £925,001 and £1.5 million
12% over £1.5 million
So using our example above, of a house or flat costing £350,000 you would have paid Stamp Duty at 3% i.e. £10,500.
But, now the calculation goes as follows:
The first £125,000 of the purchase price is exempt
The next £125,001 and £250,000 is taxed at 2% (£2,500)
The next £250,001 and £350,000 is taxed at 5% (£5,000)
This results in a Stamp Duty cost of £7,500 – a saving for you of £3,000 – Hip Hip Horray
Total Saving on Stamp Duty and Land Registry Fees
So, the good news is that at the beginning of 2014 compared with the end of 2014 and now you would make a saving of £3135, £3000 in Stamp Duty and £135 in Land Registry Fees.
And, guess what?
We’ve updated our free online Conveyancing Calculator for you to number crunch for yourself.
So never mind about people telling you the thousands and thousands they paid their Conveyancing Solicitor – you know better.
What’s more it is cheaper to move now than it was 18 months ago.
Now that’s not bloomin’ bad, is it?