Conveyancing Fees: Where Does All The Money Go?
Day 12 of Everything you need to know about buying and selling a house or flat -“Conveyancing: Where Does All the Money Go?
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 or flat 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?
A whopping 90% to the government in Stamp Duty Land Tax and VAT, with a further 2 and a bit percent to another Government Department, the Land Registry.
It is incredible that out of a total cost of approximately £11765 that around £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.
Personally, I would hazard a guess that we must have enough in the kitty by now to have a go. At the very least reclaim Calais.
How much is Stamp Duty?
Stamp Duty kicks in a £125001, on which you will pay Tax at 1% of the whole purchase price. you will pay 1% up to £250000.
There is a concession at the moment for first time buyers up to £250,000 where they will pay no tax.
However, if you are buying with someone else, both parties must be genuine first time buyers, and neither can have owned a property before even if they may be renting at present.
Over £250001 and upto £500000 you pay 3% and 4% above thaFor those of you lucky enough to buy a property over £I,000,000 pounds, you will from April 2011 pay SDLT on 5%rather than the current 4%.
If you are curious you can access the Clutton Cox special online Conveyancing Costs Calculator here and find out for yourself.
So next time you are in conversation with someone who has just purchased a property and claimed that their legal fees were in the thousands of pounds, you have the opportunity to remind them where the money really went!
Be sure to sign up for a chance to have your Conveyancing carried out by Clutton Cox, free of charge