7 Additional Costs of Buying a New Home
“Buying a new home is an exciting, albeit expensive milestone. While the purchase price of your brand new home is the largest expense, there are many additional costs when it comes to buying a home that are often overlooked.”
1. Solicitor fees
"The fee charged by a solicitor will vary from firm to firm, and may vary according to the level of service to be provided. Competition amongst solicitors for business is real and has benefited consumers.
“First time buyers should try and obtain quotes from at least 2 firms, if not 3 before embarking on a purchase. Be sure to ask for a quote for the whole bill, not just the fee, but do study the fee element. Normally there should be one fee for the work involved so be alert to anything that looks like an additional fee.
“Typically, your solicitor fees could cost between £500 and £900. Value added tax will be added to that at 20%
2. Land and title registration dues
“Registration dues are the fees levied by The Registers of Scotland. One of the Registers maintained by them is The Land Register of Scotland. This is a public Register, in which transfers of title to land and buildings must be registered to create the legal right of ownership. It is also the Register in which subsidiary rights in title to property are registered to make them effective. The most frequently occurring example of such a subsidiary interest is the registration of a Standard Security in favour of a mortgage lender.Charges for this Register are on a sliding scale of bands relating to the consideration, or value of the debt.
“The cost of registering a disposition, (the document that transfers title from seller to buyer), where the consideration is £200,000 is £400. At £250,000 it is £530 and at £300,001 it is £660, and it remains at that up to £500,000. The charge made for registering a Standard Security is a flat rate of £80.”
3. LBTT
Land and Buildings Transaction Tax (LBTT) applies to purchases of residential property costing over £145,000, although for first time purchasers the nil rate band is extended to £175,000. The imposition of tax is not a straight - line rate but is applied at increasing rates, in bands, as the purchase price rises.
“For example, the LBTT on a property costing £250,000 would be £2,100 If the purchase price is £300,000 it rises to £4,600.
4. VAT
“VAT will be applied to a number of different moving costs, including solicitor fees for both buyers and sellers. The VAT charged will be shown on your final statement. If an entry has VAT added to it separately, that suggests it may be an additional fee.”
5. Storage costs & short term accommodation
“Moving home takes a lot of planning and organisation but despite your best efforts, the process may not be as seamless as you would hope. If your date of entry does not marry up with when you have to move out of your previous home, the cost of temporary accommodation and storage can add up, particularly if it’s for a prolonged period of time.”
6. Removal costs
“The price of removal is another significant cost when it comes to moving home, especially for those moving to a new area.
“Costs involved will be dependent on the size of your home, the amount that you are moving and the distance that you are travelling.
“Depending on your circumstances and your available budget, you can arrange for a professional to pack your belongings for you before moving them, disassemble and reassemble larger pieces of furniture and standard removal services. While this is all helpful for making your move more seamless, removal costs can be an often forgotten expense since it is right at the end of the moving process.”
7. Decorating and furniture costs
“It’s not until you move into your home that you really get a feel for it. Getting your new home to your taste and putting your own stamp on it can cost time and money, so it’s better to be realistic with your expectations. Laying new carpets, curtains, or even the finishing touches can all add up to a considerable expense that may be overlooked when you are focused on the legalities and logistics of moving.”
“Buying a house is exciting, but it is important that you have a clear idea of what you want and what you can afford within your budget. When you are serious about a house, work out the cost of the LBTT, fees etc. to make sure that you are comfortable with the cost of the move.”
At ASPC, we want to help both buyers, renters, and sellers across the North East. Our team has created a range of insightful blog posts and information pages that will inspire, inform and guide you.
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