Given the number of parties involved in the process, it’s hardly surprising that the cost of selling a house can add up pretty quickly. It’s vital to understand how much you’ll be paying – and to whom – throughout this process in order to help you budget accurately. As a starting point, read on for our in-depth guide to the costs of selling your property.
What are the taxes on selling a house?
The majority of taxes associated with the sale of property – such as Stamp Duty Land Tax in England and Northern Ireland, or Land Transaction Tax in Wales – are paid by the buyer. However, in some circumstances you may be required to pay taxes on selling a house.
Capital Gains Tax (CGT) is paid by the seller in certain circumstances. You don’t need to pay CGT when selling your home if you fulfil all of the following criteria:
- You didn’t purchase the property solely to make a profit
- You haven’t used part of the property for exclusively business purposes
- You only have one home, and have lived in it as your main home since you bought it. Married couples and those in a civil partnership can only count one property as their main residence at any given time
- You haven’t rented out part of the property (although this doesn’t include having a single lodger)
- The full property – incorporating the grounds and all buildings – measures less than 5,000 square metres in size
If all of the above apply to your sale, you won’t need to take any further action as you’ll automatically be given Private Residence Relief.
However, if you make a profit on the sale of a property that isn’t your home – such as business premises, an inherited house, or a buy-to-let property – then you may have to pay CGT. To find out, you’ll need to calculate your gain – typically, the difference between the price you paid for the property and the amount you sold it for. You will need to pay CGT on the sale of a property if your total taxable gains exceed your annual Capital Gains Tax allowance (£11,700 for individuals and £5,850 for trusts).
The UK government offers further information on Capital Gains Tax, including whether or not you need to pay it and how to calculate your liability.
Your conveyancer is responsible for dealing with the various legal issues associated with selling a property. As such, the price can increase depending on the complexity of the sale, although it is more often tied to the value of your property.
As with any other costs of selling a house, make sure you request an itemised quote when searching for a conveyancer to avoid being hit with unexpected charges for “extras” such as phone calls and photocopying. Costs such as these should be included within your conveyancer’s standard fee.
To encourage a smooth, swift sale, we offer a legally prepared conveyancing service, which we strongly recommend to our clients. It guarantees that your conveyancer will already have been briefed on the specifics of your sale, speeding up the time taken for them to issue your contract.
Estate agency fees
Rather than viewing it as just another cost of selling a house, bear in mind that your estate agency fee is paying for a wealth of expertise and a huge network of contacts that would otherwise be out of your reach.
A reputable estate agent will take a huge amount of stress away from the process of selling your house, from compiling a comprehensive, step-by-step marketing plan to reaching thousands of potential buyers every month. At Chancellors, we pride ourselves on achieving the best price for your property in a timescale that suits you. Read more about our approach to selling your home here.
Because our marketing strategy will depend on your circumstances, where you live and the type of property you’re selling, we put together a bespoke home selling package for all of our clients. Use our Branch Finder to locate your nearest Chancellors branch and give them a call to get your personalised quote.
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Energy performance certificate
You’re required by law to have an energy performance certificate (EPC) whenever most types of property are sold or rented. For homeowners, the most common exceptions to this rule are:
- Residential buildings intended to be used for less than four months a year
- Listed buildings, for which you should seek advice from your local authority’s conservation officer if any energy-efficient upgrades could impact on the character of the property
Containing details of the property’s typical energy costs and recommendations about how its energy efficiency could be improved, the EPC must be ordered before your home goes to market – you can be fined for failing to have one. The certificate includes a rating from A (most efficient) to G (least efficient) and is valid for ten years.
To get an EPC, you’ll need to appoint an accredited surveyor. Your estate agent should be able to arrange all of this for you. Alternatively, the Ministry of Housing, Communities & Local Government offers a free tool for finding surveyors in England, Wales and Northern Ireland; Scottish residents can use the Energy Saving Trust’s dedicated search function. According to the HomeOwners Alliance, the certificate will typically cost £60-120.
Ready to sell your home? Take the first step by requesting a free, no-obligation property valuation today!
Correct at time of publication (20th November 2018). The views and opinions expressed herein are those of the individual contributor and do not necessarily reflect those of the Chancellors Group of Estate Agents Ltd or its subsidiaries. References to legislation, best practice and other matters with legal implications such as fees, rules and processes are included for information and editorial purposes only and are not authoritative, nor should they be interpreted as advice. When in doubt you should only take advice from an industry professional or solicitor where appropriate. E&OE.