Ultimate Home Selling Guide - Costs, Taxes etc.

Estelle_Page

The online estate agents eMoov have put together an 'ultimate guide to selling your home' here

It has lots of stuff in it about presentation and a checklist for running a viewing, but there's especially a lot of info on this page about the costs involved that could hopefully help save you money! (Links at the top of that page talk about different taxes etc.)

googler

Since the content has all been written by the online agent, it's biased toward their business, not least by overstating the costs of conventional agents. In other words, it's not an impartial 'guide', more an advert for their business. Anything described as an 'ultimate' guide, should, by it's nature, be neutral in tone and fact.

The differences between an online agent and a high street one are minimised and understated, whereas the differences between the fees are magnified and overstated. In other words, it's biased to make them look good.

In one place they quote 'average fees' of 1.8%, in another place it's 2.0% (they can't decide which it is?) and both figures are higher than the averages determined by the OFT a couple of years back, which, if you look them up, were 1.6% in E&W, and 1.1% in Scotland, giving a true figure of around 1.35%.

Their guide may be appropriate for E&W, but I'll bet has no detail about Scotland.

Estelle_Page

Ah right. The info about taxes etc. isn't biased though - things like stamp duty, mortgage fees and inheritance tax are the same whatever estate agent you're choosing. I think that stuff is useful for first time buyers (or, like me, second time buyers who'll be forking out for stamp duty for the first time - not looking forward to that!)

googler

Estelle_Page wrote: »

Ah right. The info about taxes etc. isn't biased though - things like stamp duty, mortgage fees and inheritance tax

I haven't read it, but ... Inheritance tax?

Estelle_Page

googler wrote: »

I haven't read it, but ... Inheritance tax?

Yeah, there's some stuff about it on the 'tax costs' link - if a parent or someone else dies and leave you a house, you have to pay tax to receive it, but only if it's high value (£325,000 or more). It sounds like if they give you the house as a gift and then die within the next 7 years you still have to pay tax to keep it too, which doesn't seem very fair!

Keekles

You're right that inheritance tax is due on anything over the £325k allowance. With regards to the 7 year gift - it's on a sliding scale to prevent people gifting their estate immediately before they die as a means of tax evasion.

You receive a 'discount' rate of tax if the death occurs 3 years after a gift, the discount increasing each year thereafter until the end of the 7th year in which it becomes exempt from inheritance tax.

And technically, you won't be paying anything on an estate that you've inherited - the deceased is liable for the tax; therefore you inherit the remaining as opposed to 'paying' it yourself.

Estelle_Page

Keekles wrote: »

And technically, you won't be paying anything on an estate that you've inherited - the deceased is liable for the tax; therefore you inherit the remaining as opposed to 'paying' it yourself.

What happens if you inherit say a 400k house, but you have no savings whatsoever to pay the tax due? Can the bank legally sell the house, take the tax owed and give you the rest of the money?

Not that I'm likely to inherit anything anytime soon, just curious! It seems a shame that people might lose out on a house they grew up in that's sentimental to them just because they don't happen to have a massive savings accounts at the ready.

Keekles

You'd be liable for 40% of £75k (£30k), of which you're required to find 10% upfront in a 6-month deadline (£3k) if you plan on selling the asset.

Alternatively, you can pay in installments should you wish to keep the property - in this scenario you would be liable to £3k+interest per year until paid.

Estelle_Page

Keekles wrote: »

You'd be liable for 40% of £75k (£30k), of which you're required to find 10% upfront in a 6-month deadline (£3k) if you plan on selling the asset.

Alternatively, you can pay in installments should you wish to keep the property - in this scenario you would be liable to £3k+interest per year until paid.

Ah okay, that seems much fairer. Thanks

Lord_Baltimore

00ec25 wrote: »

if you want to learn about inheritance tax then perhaps it would be better to start a new thread as this one is now well off course

Apologies for perpetuating the point on Inheritance Tax but this is important for readers of this thread: property that passes between husband and wife on death is not subject to inheritance tax but the person who has died is entitled to the same £325k exemption.

This means, for example, if your Dad dies and the property is left with your mum, there is no Inheritance Tax to pay. When your mum dies and leaves the property to you, there is a £325k exemption for your mum and a £325k 'unused' exemption from your dad - a total of £650k.

So if you inherit a £400k property in these circumstances, you're covered!