Whether you're a layman looking to understand your own transaction or a lawyer needing assistance with a client's conveyancing our step by step sale and purchase guides will lead you through the process while our mini guides will break the whole thing into manageable chunks and give a deep insight into the key issues and stages. Leasehold, freehold, unregistered, registered – we've got it all covered.
Need help with a remortgage or transfer of equity / deed of gift? Our guides will walk you through the process and highlight some of the common pitfalls. Mortgages and transfers can be very simple procedures but complex issues can sometimes arise and mistakes are easily made. These guides will help you deal with them.
So you want to have a go at your own conveyancing? First you should read about the risks, then if you're still happy to proceed, our guides will take you through each stage of the process telling you what to look out for and helping you avoid falling into expensive traps. Our subscription service will give you access to all of the documents you should need for your conveyancing and we can even supply you with the Land Registry Official Copies you'll need. Our general guides will cover all the obstacles you are likely to face and offer a practical solution. Have a look at our sale and purchase guides too.
A big part of the conveyancing process is the conveyancing searches. This section tells you all about them. What they are, how and when to order them and how to interpret the results. Each search has its own guide and you'll see they are separated into Standard (should be done in every case), Regional (area specific) and Optional (not essential but often useful tools for the would be purchaser). All buyers should beware that when you buy a property, the law assumes that you have seen the information that would have been revealed by searches whether or not you have actually carried them out, so you buy the property subject to the results.
Using a conveyancer to handle your conveyancing will greatly reduce the risk to you and sometimes, particularly if you are taking out a new mortgage, you will have no choice but to instruct a conveyancer. The good news is it doesn't have to break the bank. Get a free, instant quote here. We can also help with quick easy quotes for other moving related services.
Are you looking for the documents you'll need for your conveyancing transaction? Or official copies of the title or other documents from Land Registry. We can help you. Follow the links below.
It is recommended that the whole of this section is read before proceeding to exchange of contracts.
Stamp Duty Land Tax (SDLT) is the new name for stamp duty. Stamp duty is a tax payable on property purchases. It is charged as follows:-
£0 - £125,000 - 0%
£125,000 - £250,000 - 2%
£250,000 - £925,000 - 5%
£925,000 - £1,500,000 -10%
£1,500,000 + - 12%
To clarify, consider the following worked examples:
Purchase price £300,000
Tax on first £125,000 £0 (0%)
Tax on next £125,000 £2,500 (2%)
Tax on balance of £50,000 £2,500 (5%)
Total Tax: £5,000
Purchase Price £2,000,000
Tax on first £125,000 £0 (0%)
Tax on next £125,000 £2,500 (2%)
Tax on next £675,000 £33,750 (5%)
Tax on next £575,000 £57,500 (10%)
Tax on balance of £500,000 £60,000 (12%)
Total Tax: £153,750
It is now necessary for a purchaser of land where the purchase price is more than £40,000 to complete and file a tax return, known as a form SDLT1. This is normally done by the purchaser's conveyancer. The SDLT1 must be completed even if no tax is actually payable.
The tax return required is called an SDLT1. I cannot reproduce the form here since each one is individual, having its own unique reference. A form together with a payslip (which is also unique) can be obtained by calling the Inland Revenue's Order line on 0845 302 1472. Most conveyancers will submit returns online.
The Inland Revenue's guidance on completing the SDLT1 and any additional forms needed can be found on HMRC's website. The notes are already very comprehensive and I therefore have little to add. You should complete the return as far as possible prior to exchange of contracts. This will help to avoid delays in submitting the return following completion and so help to avoid the penalties described below.
The return must be received, correctly completed, by the Inland Revenue no later than 30 days following completion of the transaction. Failure to do so incurs a penalty of £100, whether or not any tax is actually payable. If the return is more than 3 months late then the penalty is £200 and also interest on the duty payable (if any) will begin to accrue and be payable.
Following the submission of a correctly completed return together with any duty payable the Inland Revenue will issue a Revenue Certificate known as the SDLT5. It is necessary to submit this certificate to H M Land Registry along with the application for registration of the purchase. Without this certificate the transaction cannot be registered.
Form SDLT60 was introduced in 2002 to be used in cases where it was not necessary to submit a return to HM Revenue & Customs in form SDLT1 (for example transfers resulting for a court order or transfers for no value). It was a self-certificate of exemption and was sent to the land registry in place of an SDLT5.
Following a recent change in the rules designed to simplify the process however no form now needs to be submitted in situations where the SDLT60 would previously have been used; therefore it is effectively now obsolete.
A transfer of equity is when someone's name is added to, or removed from, the deeds, but one or more of the original owners remains on the deeds following completion. This will typically happen when a couple separates and one buys the other out, or when a couple get together and one moves in with the other.
Unless the consideration is less than £40,000 then an SDLT1 must be submitted and duty may be payable. The consideration (purchase price) for tax purposes is calculated as the share of any mortgage secured on the property that the new (or remaining) owner/s is/are taking on plus any money paid to an outgoing owner or by an incoming owner for his share, so for example, if A and B own the property with a mortgage of £100,000 and it is transferred into A's sole name then A is taking on B's share of the mortgage - £50,000 - therefore the consideration is £50,000. If A also pays B a premium for the share, say £25,000, then this is added to the £50,000 making a total consideration of£75,000. As this is below £125,000 no tax will be payable but an SDLT1 must still be used. Another example is where someone is being added to the deeds. Let's say that A owns the property and wants to transfer it into the joint names of himself and B. There is a mortgage of £300,000 and B is sharing the liability for the mortgage, so the consideration is half the mortgage, i.e. £150,000, therefore tax is payable.
Please note that where a name is being added to the deeds and a new mortgage is being taken out as part of the transaction then the new borrowing does not count toward the consideration, so if A owns the property outright without a mortgage and transfers to himself and B and A and B take out a mortgage at the same time, the consideration is zero (provided B does not pay A for a share).
As with any tax, people will always look for ways to avoiding paying stamp duty land tax. There are methods which are legal and methods which are not.
Where the purchase price is on or just over one the stamp duty thresholds a purchaser may apportion the purchase price between the property itself and chattels (fixtures and fittings). It is fairly usual for a conveyancing purchase to include a payment for chattels sold by the seller to the buyer and it is quite right to separate chattels payments from the purchase price since duty is not payable on chattels. For example, say the buyer has agreed to pay the seller £251,000 which includes furniture worth £2,000. For convenience the furniture is included in the sale contract and the payment of £2,000 is included in the property purchase price but seller and buyer could just as easily carry out the furniture transaction separately and set the property purchase price at £249,000. In these circumstances the property and chattels prices are separated on the contract, the price in the transfer deed (which relates only to the land transaction) is entered as £249,000 and the buyer pays duty at 1% rather than 3%.
Inevitably, buyers may attempt to abuse this option by artificially inflating the value of chattels so as to reduce the purchase price, for example by agreeing to pay £249,000 for the property and £5,000 for a garden shed, or even by declaring chattels that are not actually being purchased at all. This, not surprisingly, is fraud and is of course a very serious criminal offence. HMRC will investigate a number of transactions where the purchase price is just below a stamp duty threshold and will presumably prosecute if they find evidence of wrongdoing.
If the purchase does include chattels and the declared purchase price of the property alone is under a threshold buy the chattels price, if it were added to the property price, would take it over, it would be wise to have the chattels valued (remembering that the relevant value is the value as second hand not what the item would cost to buy new). This might mean for example asking a local auction house to value the items, or it could be as simple as looking for similar items on auction sites like EBay or in second hand shops. As long as evidence can be produced, should HMRC investigate, that the price paid for the items was a fair price and that they were actually purchased, this should suffice, though in this situation professional advice should be sought.
There a number of organisations who operate stamp duty avoidance schemes, which try to find loopholes in the law to help people avoid paying some or all of their stamp duty in return for a fee. They are usually aimed at higher value properties. These schemes should be treated with caution. Naturally enough, the organisation will not reveal how it is done until you have paid a fee or contracted to do so and even then it may not tell you any more than you absolutely need to know. Aside from the fact that the schemes may not always be legal, leaving you liable for criminal prosecution, they may put your ownership of the property at risk. In addition most mainstream mortgage lenders will not lend where the buyer is taking part in a stamp duty avoidance scheme – see the CML handbook for a particular lender you are interested in.
There are quite possibly some avoidance schemes that are perfectly legitimate and they should not be dismissed completely out of hand however once the terms are known independent legal advice should be obtained before deciding whether to proceed. If you decide not to proceed it is unlikely any fee you have already paid will be refundable.
When buying a property which is shared ownership, which involves taking a lease under which you as the tenant is entitled to only a percentage of the equity and the landlord (usually a housing association or other registered social landlord) is entitled to the remainder, it is possible to choose when the lease is first granted to pay duty either on the share purchased or on the initial market value of the whole. For example, if the property is value at £200,000 and you initially purchase a 50% share for £100,000, you can either pay duty on £100,000 (plus the rent though will not usually affect the duty payable unless the purchase price is close to a threshold) or on £200,000. In the first scenario the duty payable would be zero as the premium is less than £125,000 whereas in the second it would be £2,000.
If the duty is paid on the higher figure of the initial market value then, when further shares are purchased, no further duty will be payable whereas is initially it is paid on the price paid for the share, it will need to be paid also on any additional shares purchased. What might happen is, a 50% share might be purchased for £100,000 and duty paid on that figure but then by the time the other 50% is purchased the value of the property has risen so that the half share is worth more than £200,000. This means that more duty is paid than would have been if it had been paid on the initial market value.
The relief from paying duty on additional shares applies only when the original purchaser subsequently purchases additional shares. If he sells his 50% share and his purchaser later buys further shares he will have to pay duty on both transactions (i.e. the purchase of the 50% share from the original tenant and the purchase of the remaining 50% share).