RESIDENTIAL CONVEYANCING – SALE AND PURCHASE – TYPICAL LEGAL COSTS
There are two main elements to the legal costs of completing a sale and purchase:
- our charges; and
- expenses we must pay out of your behalf.
We have a minimum fee of £1,500 (plus VAT and expenses) for either a sale or a purchase.
By way of example, for a freehold purchase of a £2 million property with a mortgage, the charges typically range from £4,000 – £7,000 (plus VAT and expenses).
For the same purchase price and using the same example as above of the £2 million property, our charges for a leasehold purchase will be from £4,750 – £7,500 (plus VAT and expenses).
Our hourly rates vary depending on who in the firm is involved in your matter. This can range from £120 (plus VAT) for a paralegal – £540 (plus VAT) for a partner.
Please note that these are our average charges, therefore please do get in touch with details of your own transaction so that we can provide you with a bespoke fee estimate.
The exact cost depends on the specific circumstances of your case. The above range of costs is based on the following factors:
- the title of the property is registered;
- the property is already built;
- dealing with leasehold enfranchisement situations that may arise;
- the transaction is concluded in a timely manner;
- all parties are co-operative and there is no unreasonable delay from third parties providing information;
- the terms of any funding required to purchase the property is agreed;
- any potential defective titles which require remedying before completion;
- if this is a leasehold transaction, no lease extension or enfranchisement (buying a share in the freehold) is required. If you have any enfranchisement requirements, please contact us as we have a specialist team for this type of transaction;
- no indemnity policies are required.
We would usually expect to incur certain expenses on your behalf which we will also add to your bill. The amount of expenses can vary and the following is an estimate only:
|Expense||Estimated amount||VAT chargeable|
|HM Land Registry fee||£40 – £910||No|
|Search fees||£500 – £750||Yes|
|Electronic money transfer fee||£30||Yes|
STAMP DUTY LAND TAX (SDLT)
This will be payable in addition to the expenses above and depends on the value of the property. There are many permutations in calculating the duty payable based on each individual circumstance. To use the aforementioned example of a freehold purchase of a £2 million property with a mortgage, it being the main and principle residence and no other test needing to be applied, the duty payable would be £153,750. If other property is owned worldwide, the 3% uplift may apply depending on the specific circumstance and, if this were to be the case, the duty payable would be £213,750.
You can calculate the amount payable using the online calculator on HMRC’s website – https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro.
HMRC guidance frelating to SDLT for properties in England is available here – https://www.gov.uk/topic/business-tax/stamp-taxes.
There are different rules for a corporate body purchasing residential property for more than £500,000 – https://www.gov.uk/guidance/stamp-duty-land-tax-corporate-bodies.
If the property is located in Wales, additional guidance from the Welsh Revenue Authority is available here – https://beta.gov.wales/welsh-revenue-authority.
Please note that the above links are for guidance only and you should take specific advice form a tax specialist. Such advice would fall outside the scope of our acting on your purchase but we do have specialists who could advise in this respect, if required.
On leasehold property purchases, you should also be aware the ground rent and service charge are likely to apply throughout your ownership of the property. We will confirm the ground rent and anticipated service charge as soon as we receive this information. We will provide an accurate figure once we have seen the relevant documentation for the property.
ESTIMATED TOTAL LEGAL COSTS
The above fee cost ranges includes the key stages of a property purchase:
- implementing the legally required anti-money laundering checks;
- taking instructions and giving initial advice;
- checking finances are in place to fund the purchase;
- receiving and advising on contract documents;
- carrying out searches and making any necessary enquiries of the seller’s solicitor;
- giving advice on the documents and information received;
- reviewing the conditions of any mortgage offer;
- sending final contract for signature;
- preparing the Transfer and advising on joint ownership;
- obtaining pre-completion searches;
- agreeing completion date;
- exchanging contracts and notifying when this has happened;
- arranging for all monies needed to be received from any lender and you;
- completing purchase; and
- dealing with the payment of Stamp Duty Land Tax and application for registration at Land Registry.
They specifically do not include (please note that this list is not exhaustive):
- the cost of obtaining any title indemnity policy required;
- providing tax advice other than in relation to the calculation of the SDLT liability;
- advising on and arranging any lease extension or enfranchisement.
LIKELY TIMESCALE AND KEY STAGES
How long it will take from your offer being accepted until completion of the purchase will depend on a number of factors. On occasions where the matter is urgent, this can sometimes be completed within a day or two. The timescale may vary depending on the parties in the chain; sometimes it can take several months, however the average process takes between six to eight weeks.
If any complications of any nature arise the matter may take longer. We will advise you if and when this occurs.
Our team has over 40 years of collective experience in delivering high quality work relating to the sale and purchase of residential property. Regardless of who works on your matter, they will be supervised by one of the partners in our residential property team. For more details of the members of the team who may work on your matter, please see the residential property page on our website.