15th January 2024 | Caroline Vernon | Residential Real Estate, Buying, Selling,
Embarking on the journey of purchasing a property can be both thrilling and daunting.
Whether you’re a first-time buyer or a seasoned investor, navigating the real estate market requires careful consideration and strategic planning.
Here are our top five property tips to help you on your pursuit for the perfect property:
1 – Financial Arrangements
Whether or not finance is needed, speak to a broker early on in a transaction and preferably before your agent agrees on the main elements of the purchase.
Raising finance once the exchange has taken place, makes for a fraught completion experience for both you and your lawyer.
2 – Planning the Completion Date
If you are selling a property to raise money for your purchase, ensure that the completion date of the sale is on or before the completion purchase. This may sound obvious, but it will avoid surcharged rates of SDLT (Stamp Duty Land Tax) being paid at 3% above the standard rates. These rates are paid even where your main residence is being replaced with the Revenue requiring you to claim a rebate once the additional main residence is sold.
You can also avoid the need to use your cash reserves for a deposit, as a deposit held on your sale can be used for your purchase where the property is in England and Wales.
3 – Surveyor’s appointment
Appoint a surveyor. They will flag items that you may not necessarily have spotted on your brief viewing, such as issues like dampness, faulty wiring, etc.
By having the Surveyor identify these issues they can help you identify the necessary costs of repair, which can ultimately be used in negotiating the asking price from the seller.
4 – Your Lawyer
Make and keep a relationship with a lawyer and update them on your transaction. This is particularly important where you are marketing a property sale, to ensure that deadlines, that you or your agent impose, can be met by buyers. A full sales pack with all title deeds, up-to-date searches, planning and building information can be pulled together.
Plan for exchange well in advance. Weeks of delay can be avoided if all the fact-finding has been completed in advance. Attended exchanges do still occur so be prepared. If there are any title difficulties, these can be addressed in advance.
5 – Your Accountant
Take tax advice. You may not be a resident in the UK, you may own other properties worldwide or hold a portfolio of investment property. Early tax advice will be required to work out CGT (Capital Gains Tax) liability on sale and IHT (Inheritance Tax) liability on death.
SDLT matters will be more complicated, where other property is held and often a detailed assessment is required to determine the SDLT rates payable by you. Where your company owns the title to the property, ATED (Annual Tax on Enveloped Dwellings) charges will be made annually and your accountant will need to claim any exemptions in your annual tax return.
You may have very specific requirements which must be conveyed to all parties. You may want to access the property you are buying between exchange and completion with architects and builders to obtain quotes or for interior designers to start planning works. The seller may even agree to you commencing limited works to help you move forward with quickly with your plans.
Where you are buying a bolt hole which is a leasehold property, a landed estate owner may own the freehold, for example the Grosvenor or Portman Estate. Do not be surprised when you are asked for onerous references to obtain the landlord’s consent, in lieu of rent or service charge deposit.
If you are buying a turnkey, consider if there are any service charges for the shared estate roads and whether building warranties for any building works are available.
Where you are buying expensive items of furniture, artwork, electrical items, to be left at the property, a full inventory of those items with costings will need to be included. Such items do not attract SDLT but they must be justifiable in their costings.
To find our more about buying or selling your property, contact us here.