Got the Fees Covered, What Else?
Buying a new home is portrayed at the outset as being as simple as choosing the house then your carpets and decor but the vast array of fees and costs behind it all can be daunting or worse still, hidden. We don’t want to put you off a move up the property ladder if it’s the right thing to do, but with a comprehensive list of costs you can realistically see how far up the next rung actually is, not just estate agents' asking prices. Another article has dealt with mortgage, valuation and legal fees. This article will look at stamp duty, surveys, removal costs, repairs, furniture and extras.
Stamp Duty, The Chancellors Booty
Widely regarded as one of the most unfair taxes of all, Stamp Duty changes depending on different thresholds of property value. Each step up the threshold ladder adds a one percentage point increase starting at zero with a maximum of 5% for the more expensive properties. Whilst we in Britain are used to a “unless you can eat it, tax it” government, Stamp Duty can be particularly harsh because once a property is valued above a certain threshold the tax applies to the whole value not just the amount above the threshold. i.e. a property of £126k will not have 1% stamp duty applied to the £1,000 over the 1% £125k threshold but ALL the £126k in total.
Stamp Duty Thresholds
Purchase Price Stamp Duty Rate
Up to £125,000 Zero
£125,001 to £250,000 Zero (first-time buyers) 1% (everyone else)
£250,001 to £500,000 3%
£500,001 - £1 million 4%
£1 million or more 5%
How much you need to allocate on removal costs clearly depends on several factors unique
to each move. E.g how much stuff you've got, how many large items you have, age and agility of the home owners, distance between old and new properties, availability and reliability of your mates come move day!
Don’t skimp on the surveying budget and don’t expect it to be limited to one survey. Admittedly if the survey shows a ‘humdinger’ of a structural problem you won’t get the money back on the survey but at least you will have avoided buying a very expensive headache and a divorce. Often the first survey will throw up some issues that may require deeper investigation, expect to pay around £800 for in total for both surveys. In some cases the vendor may adjust the asking price to accommodate any repairs that may be needed but they are by no means required to do this. As cynical as it sounds, if the second survey exposes the need for very expensive remedial work and the vendor won’t budge on the asking price, the problem could be why the vendors are moving in the first place, as they themselves are unable to afford the repairs.
Structural work aside the cost of simple repairs and decorating depends on whether you DIY or not. Employing professional decorators will cost around £100 a day and you can expect to pay similar wages for other maintenance work in the home or garden.
Furniture & other stuff
If you're buying your first home and you’re already stretched then check out the freebie websites that may be able to help or beg and borrow 'til you’re settled. If you have furniture to take from you old house ensure the carpets and other fittings are taken care of before flat screen TV etc!
Images courtesy of sxc.hu