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Find out more about the fees involved in buying a house


Land Registry fees

The Land Registry charges a fee when making changes to the title documents held at the Land Registry. Their job is to register properties under the owners' name, so when you buy a property from someone else, the Land Registry charges a fee to transfer their register entry into your name. The fee is dependant on the price of the property you’re buying, but usually range between £200 to £500.

Local authority search fees

When buying a property your conveyancing lawyer will submit a Local Authority Search on your behalf that will come at a fee. These fees usually cover things like local searches, drainage and sewers, environmental searches and sometimes mining, if applicable. The searches also highlight any restrictive covenants that may have been written into the lease/freehold. These could prohibit any alterations to the property, such as future extensions etc., without prior permission.

The searches vary in price, but will be clearly outlined by your solicitor/conveyancer. You will likely have to have one of these if you are getting a mortgage in order to meet your mortgage lender’s requirements. If you are a cash buyer you do not have to have the search conducted, but your conveyancing lawyer will always recommend one.

Reservation fee

Once you have found your ideal new build home, you will need to reserve it. You will need to pay the developer a reservation fee that secures the property at the agreed price for a certain period of time (usually 28 days). The developer cannot sell to anyone else or raise the price provided you exchange contracts on time. Check the terms in the reservation contract carefully – in particular whether the reservation fee is refundable or non-refundable, or if there are deductible expenses from this fee if you do not proceed with the purchase within a set period of time. These differ from every house builder.

How do I reserve a new home?

Everything you will need to provide when you reserve your new home:

  • The cost of the reservation fee (differs depending on builder)
  • 3 months payslips and latest P60 (if self-employed, copies of 2 years accounts)
  • 3 months bank statements
  • Proof of exchange deposit/proof of purchase funds
  • Copy of your passport (for non-UK citizens also a copy of valid visa)
  • Proof of your address (from a recent utility bill or driving licence)

How much money is required as a reservation fee?

A reservation fee can vary depending on the property or the developer. A reservation fee can range from as little as £200 to over £2,000.

How long can the property be reserved?

This depends on the developer. Some can be more lenient than others. The average time scale in the UK is 28 days (this can range up to 3 months if you are selling an existing home).

Stamp Duty and Land Transaction Tax

Stamp duty (SDLT)

Stamp duty is tax on land or property transactions over a certain price in England and Northern Ireland. First time buyers are exempt from SDLT on properties up to £300,000, and pay a discounted rate on properties costing up to £500,000. If you’re buying a second home, holiday home or are a landlord, you will pay Stamp Duty on properties costing more than £40,000 at the relevant rate at that time.

Stamp duty works in banded tax (much like council tax bands), so the cost varies depending on the location and the cost of the property you are buying.

Land and buildings transaction tax (LBTT)

LBTT is tax applied to residential and commercial land and building transactions in Scotland. The percentage of LBTT you pay is dependant on the price of the property or land you are purchasing. You will only pay LBTT if the property is over the relevant threshold and if the property is going to be your main place of residence. If however you are buying an additional property, you may have to pay an additional percentage of LBTT on top.

Land transaction tax (LTT)

Land Transaction Tax is the tax you pay when buy a property or land over a certain price in Wales. If you’re purchasing a residential property to live in, the tax is only payable on properties over a certain price (check government websites for the threshold at the time you purchase).

Like those in the rest of the UK, LTT is priced on a tiered system, meaning you pay different rates depending on the cost of the property.

If you’re purchasing a second home, holiday home or a buy-to-let, you will have to pay an additional sum on top of the normal residential rate.

This tax applies to both freehold and leasehold properties – whether you’re buying with a mortgage or as a cash buyer.

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