The most significant expense when buying property in the UK is the Stamp Duty Land Tax (SDLT) which is a one time levy paid to the UK’s Revenue and Customs. The amount paid varies according to the value of the property and does change from time to time however presently ranges from 1% to 7% for individuals and may rise to 15% for corporate bodies.
There is much debate by investors purchasing high value properties as to the advantages of buying a property through a corporate vehicle. The law provides exemptions for certain property companies however in most cases carrying out a cost benefit analysis may yield some savings. Factors that one should consider when deciding whether to use a corporate vehicle include the Annual Tax on Enveloped Dwellings (ATED), Capital gains tax and Inheritance tax. The use of nominee companies and trusts may provide some relief from the tax liability normally associated with acquisitions made through corporate vehicles.
Once these major items are decided upon the other costs are fairly small in comparison and these include legal costs, surveying costs, mortgage costs (if applicable), insurance costs and search agency fees (if applicable). In total these costs would normally not exceed 2.0% to 2.5% of the value of the purchase price of the property.
