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Why should I use a solicitor to buy and sell a house?

You can carry out your own conveyancing. If someone is charging you, they must either be a solicitor or a licensed conveyancer. However, if there is a mortgage involved in the transaction (i.e. you require a mortgage over the purchase property; you will have a mortgage secured against the property you are selling; or you are remortgaging your property) the mortgage company will insist that a solicitor or licensed conveyancer acts on their behalf in connection with the mortgage redemption/mortgage offer/remortgage. Usually your mortgage company will instruct the same firm of property and conveyancing solicitors who you instruct in connection with the sale/purchase/remortgage.

Even if there is no mortgage involved in the transaction, we would strongly recommend that you are advised by a solicitor because there is so much that can go wrong. Moving is traumatic enough as it is. Having a property specialist ‘hold your hand’ and avoid the pitfalls can save much unnecessary stress. After all, for most people their home is their most valuable asset.

Should I have the property surveyed? 

A survey is not a requirement of law to buy a property. A mortgage lender will always, as a minimum, have a valuation carried out, which in itself is not actually a survey but a valuation to protect the lender’s interest and does not really protect your interest.

What are the different types of building survey and how do I know which one is appropriate for me?

We would always recommend that you have a survey carried out. In the main there are two different types of survey. The first is the Home Buyers Report and the second is a Full Structural Survey. The Home Buyers Report is a concise and economical report on the condition of a house or flat and includes a valuation. A Full Structural Survey is particularly useful for old or large properties and is a more detailed report. Your Property Lawyer can put you in touch with a surveyor or alternatively the Royal Institute of Chartered Surveyors can help you. www.rics.org

Remember, the property is "sold as seen" and this means that it is up to you to discover any defects by means of inspection and surveys. A house is the single biggest purchase that most of us make in our lifetime. A survey is certainly money well spent and if you find a fault, you may be able to negotiate a lower price. You take the property as you find it at exchange of contracts. If there is a problem once you move in you have no come back on the seller.

I’m buying a property for £150,000. Do I pay Stamp Duty on all of it or just the difference between the threshold and the agreed purchase price?

Unfortunately not – Stamp Duty – now known as Stamp Duty Land Tax (SDLT), is payable on the total purchase price. The threshold for SDLT starts at £125,000 although if you buy for exactly £125,000, you pay nothing in SDLT; if you pay £125,001 then you will pay £1250 in SDLT.

We’ve set out the tax bands below

 

Purchase price of property

Rate of SDLT(% of total purchase price)

Up to  £125,000

0%

£125,001 - £250,000

1%

£250,001 - £500,000

3%

£500,001 – £1 million

4%

£1 million - £2 million

5%

Over £2 million

7%

 

The house I’m hoping to buy is on the market at £251,000. Can I avoid the higher rate of Stamp Duty by paying £250,000 for the property and £1,000 for fixtures and fittings?

Stamp Duty Land Tax, is charged on the purchase price of the land and buildings and this includes fixtures (e.g. fitted kitchens and bathroom suites) which are part of the land. However, you can agree with the seller to pay a separate sum, on top of the property price, for certain items (known as ‘chattels’) that the seller decides not to take with them when they move (e.g. curtains, carpets or other moveables such as furniture). Any apportionment of the purchase price must be on a ‘just and reasonable’ basis and you must be able to justify the allotted sum for the chattels.

What is the difference between joint tenants and tenants in common?

This has nothing to do with being a tenant. Both expressions describe the legal relationship between them when two or more people own property together.

If you buy a property as “Joint Tenants”, it means that if you die, your share would then pass to the surviving joint tenants automatically without being passed under a will. This type of joint ownership is commonly used by married couples with no commitments to parties outside the marriage (e.g. children by a previous marriage, etc.). However, that is not to say that you are obliged to hold property as joint tenants. It does not mean you need not make a will in respect of your other assets however and does not affect any tax liability (currently there is no tax liability between spouses on death).

The “Tenancy in Common” is the type of ownership you can have if you do not want your share to pass automatically to the surviving tenants in the event of your death. It is vital in this circumstance that you have a will to specify how you wish to deal with your estate.

Friends buying together would invariably choose to be tenants in common. Tenants in common own distinct shares of the property jointly purchased and can be expressed in a Deed or Declaration of Trust. If you are joint owners in a relationship but not married, you are strongly advised to adopt a tenancy in common. The reason is that if you should break up, you will not go through the normal formalities necessary to terminate a marriage (e.g. the financial settlements required by the court before granting a divorce) and it is easy to overlook the need to convert a joint tenancy into a tenancy in common.

You legal adviser will obviously discuss your requirements at the appropriate time.

 

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