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The costs associated with House Selling
bamgbost
Posts: 484 Forumite
Bit of background on our situation.
We have a B2L property we have been managing for my Father In Law who resides abroad.
He has decided that he wants to gift us a deposit, but it will come from the leftovers, once this property has sold.
We have had the property on the market for 5 months now, and had a few offers BELOW the asking price. However, in order to get into perception what could be our minimal acceptance amount. I wanted to know what deductions will come out from the sale price.
If we use the following figures for example. Mortgage remaining = £110k and Sale Price of £250k. That would leave £140k, right.
What would the figures (approximately) look like for whatever costs have to be paid out of this figure of £140k. I understand there's CGT? Solicitors? Estate Agent fee? No idea what else there is to be paid. Can anyone help highlight other costs and % to consider.
We have a B2L property we have been managing for my Father In Law who resides abroad.
He has decided that he wants to gift us a deposit, but it will come from the leftovers, once this property has sold.
We have had the property on the market for 5 months now, and had a few offers BELOW the asking price. However, in order to get into perception what could be our minimal acceptance amount. I wanted to know what deductions will come out from the sale price.
If we use the following figures for example. Mortgage remaining = £110k and Sale Price of £250k. That would leave £140k, right.
What would the figures (approximately) look like for whatever costs have to be paid out of this figure of £140k. I understand there's CGT? Solicitors? Estate Agent fee? No idea what else there is to be paid. Can anyone help highlight other costs and % to consider.
365 Day 1p challenge - £371.49 / 667.95
Emergency Fund £1000 / £1000 ( will enlarge once debts are cleared)
DFW - £TBC
Emergency Fund £1000 / £1000 ( will enlarge once debts are cleared)
DFW - £TBC
0
Comments
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Presumbly before you put the property on the market you agreed a fee with the estate agents? We don't know what you agreed!!
Likewise, we don't know what you agreed to pay your FIL's solicitor, do we?
Capital Gains Tax will depend on
* what the property was worth when it was bought
* what it sells for (and hence the 'gain')
* whether your FIL has already usd his annual CGT allownace or not elsewhere
* his income level (which can affect the CGT rate chrged - 18 or 28%)
Other potential coss:
* evicting tenants if it is still being let
* removal costs
* freeholder pack fees if it is leasehold
* mortgage redemption fee if relevant0 -
Thanks G_M for the response.
Yes we did agree. 2% I believe, as it was multi agency.
Are all the % of the Sale Price. Or of the profit?
Property was bought for £140k. So the gain would be £110k. Mortgage left - 110k. Therefore 30k is exempt of tax.
No he's abroad and not used any CGT in this tax year. What makes it 18 or 28%?
Solicitors have yet to be appointed tbh. So no cost associated with this yet. But any advice on what needs to be budgeted for?
No tenant related costs.
No removal costs.
Need to understand what the last 2 items you mentioned are - Redemption fee and Freehold pack fees365 Day 1p challenge - £371.49 / 667.95
Emergency Fund £1000 / £1000 ( will enlarge once debts are cleared)
DFW - £TBC0 -
Is the house empty or are there tenants still living there? If tenants are still in place that might explain the low offers.0
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No its empty. Been empty 2 months now/ Hoping that it would be a quick sale.
But this Q is more about costs associated with the selling process.365 Day 1p challenge - £371.49 / 667.95
Emergency Fund £1000 / £1000 ( will enlarge once debts are cleared)
DFW - £TBC0 -
Yes we did agree. 2% I believe, as it was multi agency.
Are all the % of the Sale Price. Or of the profit?
of the sale price
No he's abroad and not used any CGT in this tax year. What makes it 18 or 28%?
the rate at which he pays tax in the UK.
Also has he ever lived in the property0 -
If the property is leasehold (eg a flat) the buyer will want confirmation from the freeholder tht all the Ground Rent and Service Charges etc are paid up to date, and whetherr therre are any planned expensive major works. The freeholder will provide a pack, but you will have to pay for this: £50 - £300?Yes we did agree. 2% I believe, as it was multi agency.
Are all the % of the Sale Price. Or of the profit?
then you'll pay 2% of the eventual sale price.
Property was bought for £140k. So the gain would be £110k. Mortgage left - 110k. Therefore 30k is exempt of tax.
No. The mortgage is not tax deductabe for CGT purposes (only for income tax on the rent).
The taxable gain is 110k
No he's abroad and not used any CGT in this tax year.
so he'l have an allowance of £11,300 if the sale Completes in this tax year.
What makes it 18 or 28%?
His rate of income tax. If an overseas resident for tax purposes I'm not sure. Check out the Gov CGT web pages.
There is a calculator here.
There may also be some other allowable expenses (eg the estate agent/solicitor fees)
Solicitors have yet to be appointed tbh. So no cost associated with this yet. But any advice on what needs to be budgeted for?
Visit several lcal firms and ask for quotes.
No tenant related costs.
No removal costs.
Need to understand what the last 2 items you mentioned are - Redemption fee and Freehold pack fees
When the mortgage is paid off, as well as paying the outstanding debt owed, there will be redemption fees to cover the legal costs and admn costs of the mortgage lender. Ask the lender what these will be.0 -
Thanks guys for this info!365 Day 1p challenge - £371.49 / 667.95
Emergency Fund £1000 / £1000 ( will enlarge once debts are cleared)
DFW - £TBC0
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