Stamp Duty and relocation costs

ARTICLE: Philip Saich

 
It’s widely regarded as one of life’s most stressful events, yet moving house is something many of us aspire to in order to climb the property ladder. The stress is compounded not only if you’re buying and selling simultaneously, but also if there are other properties in the chain. Experts agree that the main stress generator is change, and that comes in the form of adapting to a new environment, altering commuting arrangements, registering with a new GP and dentist, and, if children are involved, potentially moving schools and leisure activities, as well as making new friends. As a species, we are territorial creatures who inherently lean towards familiarity and routine, so moving can create a lot of uncertainty and chaos in our lives.
Aside from the raised stress levels that property transactions can generate, it’s also important not to overlook all the costs of moving. For many, the greatest – and most reviled – cost is stamp duty, effectively a tax paid to the government for the privilege of taking ownership of your new home. Encouragingly for first-time buyers, the threshold for stamp duty to be levied is on properties whose asking price is above £125,000. From £125,001 to £250,000 stamp duty is applicable at 2%, and this rises to 5% for properties priced between £250,001 and £925,000. Moving into the million pound bracket incurs stamp duty of 10% on properties with an asking price of between £925,001 and £1.5 million, while anyone looking to buy a property priced above £1.5 million will be subject to 12%. The stamp duty levied rises on a scaled basis, so on a property priced at over £1.5 million, the percentage increases from 0% on the first £125,000 of the price to 12% on anything above £1.5 million.
As builders in Surrey, at Refresh Renovations UK we know that a large proportion of properties sit at the higher end of the market, making moving house potentially hugely expensive. The property website Zoopla shows the average house price in Surrey in June 2018 as being £599,479, which would incur stamp duty of £19,973. That amount is paid directly to the government and is effectively ‘dead’ money.

When you add in the other costs associated with moving, such as solicitor’s fees, removal costs, and the fees sometimes associated with remortgaging, the total could easily top £30,000. The outgoings don’t end there, as there are also costs that often slip under the radar, including Land Registry fees, storage fees, phone lines and broadband connections, estate agency fees (if you’re selling as well as buying) and mail redirection. Take a step back for a moment to review your current property and the thought of investing in increased space and avoiding the stresses of moving can suddenly seem very appealing. As well as improving your lifestyle, adding an extension, converting a loft or creating larger open-plan living space will doubtless add significant value over time.
Drawing on our experience, Refresh Renovations UK’s Kelley Malcher highlights the benefits of staying put that may not be immediately apparent. ‘It’s surprising, but in general, our renovation projects actually take less time than the full process of moving house, which can also be expensive and stressful, especially if the links in the chain get broken. Almost everyone has significant potential in their current home, but it often takes an expert to help unlock that potential. Our streamlined process removes the stress and risk from every project, and that’s why we believe that, everything considered, where possible it's better to renovate or extend your house rather than move.
‘Many clients we talk to are keen to increase their downstairs living space, so open-plan family configurations are very popular. We’re finding that the drive to extend is prompted by families expanding or the need to prepare the house to become a family with children. Throughout Surrey there is also a shortage of houses on the market, meaning that buyers can enter into bidding wars which only inflate the asking prices and cause additional stress for the purchasers. And ultimately we all know that moving house invariably ends up being more expensive than anyone expects. At Refresh we specialise in helping homeowners make more of what they already have, rather than embarking on a process over which you have relatively little control and which can incur considerable cost.
Refresh Renovations UK are Surrey builders offering design and build services. To discuss your home improvement project, please get in touch today using the enquiry form listed alongside, or if you would like to submit a more comprehensive enquiry, you can do so on the Get In Touch page.

You might be interested in reading Acquiring Planning Permission in the UK

Contact a Refresh about your renovation

Want to know more? Get in touch with the renovation experts at Refresh now to find out what they can do for you and your home. Refresh Renovations Specialists offer a free initial one-hour consultation that will help you make the decision whether their team is the one for you. This consultation is no obligation and is a chance to understand what they can do for you.