Cost of moving in the United Kingdom
Moving house in the UK is the greatest expense faced by most people in their lifetime. The principal costs are Stamp Duty Land Tax, estate agent fees, legal fees (conveyancing), mortgage arrangement fees (where applicable), surveys and removals. Some have argued that the costs of moving depress house sales.[1]
Stamp Duty Land Tax[edit]
Stamp Duty Land Tax is payable by the buyer of a property as a percentage of the purchase price. Prior to December 2014 above certain thresholds it increased on the whole purchase price so that, for instance, the tax on a purchase of £250,001 was 3% (£7500.03) but the tax on a purchase of £250,000 was 1% (£2500). For the tax year 2012/2013, SDLT was as follows:
| Consideration | Rate |
|---|---|
| up to £125,000 | 0% |
| from £125,001 to £250,000 | 1% |
| from £250,001 to £500,000 | 3% |
| from £500,001 to £1,000,000 | 4% |
| from £1,000,001 to £2,000,000 | 5% (from April 2011) |
| over £2,000,000 | 7% (from March 2012) |
It had been said that SDLT in this form distorted[2] or depressed the housing market due the sharp increases above certain thresholds (sometimes known as the "slab" system).[3][4] Campaigners like the Taxpayers Alliance and Stamp Duty Reform UK, argued for a progressive tax based on incremental tax bands.[5][6]
With the UK average house price in excess of £250,000 in 2014, the average Stamp Duty Land Tax payable was in excess of £7,500.[7]
From the 4 December 2014 Stamp Duty was changed to a graduated system which eliminates the big jumps in stamp duty at the threshold values. For instance a property of £600,000 under the old system would pay 4% tax of the whole asking price i.e. £24,000. Under the new system no tax is paid on the first £125,000, the next £125-250,000 is charged at 2% i.e. £2500 plus the portion (£350,000) in the £250,000-£925,000 tax band at 5% i.e. £17,500. This gives a total tax of £20,000. This change was said to be beneficial to 98% of property purchases.[8]
| Purchase price of property | Rate of SDLT (percentage of portion of purchase price) |
|---|---|
| 0 - £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1,500,000 | 10% |
| over £1,500,000 | 12% |
Estate agent fees[edit]
In 2011, Which? magazine found the national average estate agents fees to be 1.8%,[9] although fees vary widely.
Survey[edit]
There are four main types of survey: a valuation survey, a condition report, a homebuyer report and a full structural survey. Costs are likely to range from around £100 to £1000.[10] Expensive or very large properties may cost even more.
Legal fees[edit]
Legal (conveyancing) fees vary greatly in the UK according to the value of the property and the service provided[11] with one report finding that they range from £250 to £1300.[12] Costs are also increased if someone is both buying and selling.
Mortgage arrangement fees[edit]
In April 2013, The Daily Telegraph reported that research by Moneyfacts showed the average mortgage arrangement fee to be £1522.[13]
Removal costs[edit]
These will vary considerably subject to quantity of furniture/possessions and distance to travel. They are likely to range from £500 for a short distance move for a two-bed house, to several thousand pounds for a long distance move for a large house.[14]
See also[edit]
References[edit]
- ↑ Simon Lambert (2012-01-27). "Cost of moving home rockets by 70% to almost £9,000 as estate agency fees and stamp duty rises put strain on families | Mail Online". Dailymail.co.uk. Retrieved 2012-09-23.
- ↑ "House of Commons - HC 1652 Communities and Local Government Committee: Written submission from the National Association of Estate Agents and the Association of Residential Letting Agents". Publications.parliament.uk. 2012-05-01. Retrieved 2012-09-23.
- ↑ Lee Boyce (2012-07-17). "Axe 'outdated' stamp duty to help boost property market, says Countrywide | Mail Online". Dailymail.co.uk. Retrieved 2012-09-23.
- ↑ Dr. Christian Hilber (2012-07-24). "SERC: Spatial Economics Research Centre: Does stamp duty stop people moving house?". Spatial-economics.blogspot.co.uk. Retrieved 2012-09-23.
- ↑ Stamp Out Stamp Duty, The TaxPayers' Alliance, 2013. Retrieved 15 September 2013. Archived here.
- ↑ Stamp Duty Reform UK, Stamp Duty Reform UK, 2013.
- ↑ "House prices in 2014 'above 3pc stamp duty threshold'". Telegraph. Retrieved 2015-12-29.
- ↑ "Stamp Duty Land Tax". GOV.UK. 2015-12-11. Retrieved 2015-12-29.
- ↑ "Estate agents' fees exposed - March - 2011 - Which? News". Which.co.uk. 2011-03-31. Retrieved 2012-09-23.
- ↑ "What sort of property survey should you go for?". MoneySupermarket.com. 2011-07-18. Retrieved 2015-12-29.
- ↑ Choosing a conveyancer in 2013 by Graham Norwood in The Guardian, 15 February 2013. Retrieved 18 September 2013.
- ↑ A complete guide to conveyancing reallymoving.com, 2012. Retrieved 18 September 2013. Archived here.
- ↑ Mortgage fees climb to new high Jessica Winch, The Telegraph, 9 April 2013. Retrieved 12 October 2013. Archived here.
- ↑ "Choose a removal company". Rightmove.co.uk. Retrieved 2015-12-29.
External links[edit]
Media related to Moving house in the United Kingdom at Wikimedia Commons
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