Property in the UK is divided into two types of ownership - Freehold or Leasehold. Do not be afraid of those terms! It's all pretty simple. Most homes have a Freehold, and the apartment Leasehold. But there are nuances ...
FREEHOLD
This freehold property when not only the building but a piece of land on which it is located are owned by the owner, so often Freehold applies to homes, rather than to the apartments. Term Share of Freehold means that owner owns a part of the ownership of land - is becoming more and more popular scheme in the cities, where residents of a large building or complex they get together and buy the land on which their building stands.
LEASEHOLD
The concept of human reason Leasehold take a little more difficult - you parted with their hard-earned hundreds of thousands and sometimes millions of pounds for the acquisition of an object (usually an apartment), which you then seem to be rented. Let's start from the beginning. Leasehold - a use of real estate by lease for a longer time period (usually 99 to 999 years), in other words if you buy an apartment, the land on which stands a house belongs to someone else, and here it is you and rent the owner (hence the term Leasehold). Most of the apartments in the UK just is leasehold (Leasehold). Afraid that land rent is not necessary - it amounts to a nominal amount (50 to 500 pounds per year) and in any case is not the market value of the land. You especially do not worry about what the owner of the land will one day want to get rid of you. Strict and prudent English law protects the owners Leasehold!
Buying property on the right should not scare Leasehold with selection of property. In fact, virtually no difference what type of ownership (Freehold or Leasehold) you get, the more so that most buildings in central London was sold under the Leasehold for a term of 1 to 999 years. Moreover, the difference between the price of one and the other kind of property there.
Purchase Process:
1.Vashe offer (Offer)
Once you've found your dream house, which you can afford, you make an offer to buy this property (Offer). Our professional consultant will be able to skillfully negotiate a price on your behalf - there is very important to clearly understand the market and the region and on the basis of operational information, or to pay the full asking price or lower it and how it is. As soon as the issue price of a policy decision to the case are connected lawyers seller and buyer. It is imperative to find an experienced and fast-acting, a lawyer who promptly responds to all letters, requests, calls and e-poslaniya.My can recommend you a proven and competent lawyers (Solicitors). The first step is made (Memorandum of sale) - a simple document in which the names and coordinates of both parties and their lawyers, there is also better to specify what will become the property with the buyer of the property - furniture, washing machine, curtains, cooker, etc. .
2.Mestnye requests and work on the contract (Conveyancing)
Attorneys will begin work on drafting the contract, which is usually prepared in a standard form lawyers seller and then accumulates numerous additions.At the same time sent out requests to various local authorities for information about plans for further construction in the neighborhood, the development of infrastructure, transportation and many other things. At this point, you may find that, for example, next to your idyllic cottage in two years will be the highway or at your penthouse is allowed to build another floor. Then the buyer's lawyer will ask the seller all relevant information concerning the purchased object - ownership boundaries, existing disputes, who owns a building or land, whether carried out structural changes and, if so, then the lawyer must have available all relevant plans and permits.
3.Nezavisimaya evaluation facility (Survey)
It is strongly recommended, as in the case of a mortgage is required to assess the object purchased by an independent engineer, appraiser (Surveyor). Buyer finds and pays the appraiser, and pricing varies depending on the size of the object and used the company (from 500 to 1,500 + pounds). Our partners work with professional appraisers. The main task of this assessment - a determination of technical state of the object (especially important when buying a house). There are three types of evaluation - we can tell what type of evaluation is optimal for your facility. If there are certain technical problems, the evaluator writes in his conclusion about how much work will cost to correct them. Please note that the appraisers usually pick on the smallest detail, so be prepared for a long conversation with his lawyer about the finding. The document also notify you of how much the opinion of the appraiser purchased the facility should be. Traditionally, appraisers slightly underestimate the value of the object, but their recommendations, and especially the view of the technical condition can be a significant asset in the hands of the buyer for further negotiations about the price. Bidding price can vary up to exchange of contracts!
4.Obmen Contracts (Exchange)
The most awaited day for both the seller and the buyer. In an agreed day and hour lawyer buyer sends the seller a lawyer signed contract and deposit is usually 10% of project cost. At the same time, the seller's lawyer sends a buyer's lawyer signed them a contract. Since then the contract comes into legal force. The contract sets the day of completion of the transaction (Completion), that is the official entry in the buyer's ownership of real estate. Sometimes the exchange of contracts and completion of the transaction occur in the same day, but usually they are separated by weeks or even months, especially in the case of chains, if it is, of course, convenient for both sides.
5.Okonchanie transaction (Completion)
This is the day when the buyer receives the keys to your new house or apartment, and the seller at this time must fully vacate the premises. Lawyers are required to provide to the state registry (Land Registry) a document certifying the change of ownership of the object. Completion of the transaction occurs when not only all relevant documents are furnished, but the final payment is received at the expense of a lawyer seller. Money is transferred between the client accounts of lawyers, ie, original buyer deposits money to a client through his lawyer, from which the further they are transferred to the client by the lawyer seller. Client bill of costs is also known as escrow. At the same time and should be paying Stamp Duty (Stamp Duty) or the tax on real estate acquisition, which ranges from 1% to 4% (see below).
The whole process of registration of the sale takes from one to two months, somewhat longer in the case of mortgage or a chain.
Do I need to when buying a UK property have documents about the "origin of the money"?
This is not necessary, but all lawyers in the UK must comply with the law on countering the legalization (laundering) of proceeds from crime.This means that the lawyer "must know your customer": it must verify identity of the private buyer, or to check the statutes of the company, the private purchaser must also produce a copy of utility bills or bank statement confirming the address of permanent residence. A lawyer may also ask questions about the origin of the money to buy property. Remittances should be made only with the personal account of the buyer or the current account of the company, shop, and not from the account of third parties. You can use the account in Russia, and in another country. If at any stage of processing the transaction has suspicions regarding the origin of money, the attorney must notify the competent authority, otherwise it can not only lose their professional status, but also himself be subject to criminal liability.
 Additional costs charges and taxes when buying property in the UK:
-Stamp duty or tax on the purchase of property (Stamp Duty) - payable in the sale. The amount of tax depends on the value of the property and currently stands at:
to 125.000 - 0%
from 125.001 to 250,000 - 1%
from 250.001 to 500,000 - 3%
from 500.001 - 4%
-Advocacy Services - 1,000-2000 pounds + VAT.
Services company in search and selection of real estate - typically 1.5% of the final project cost + VAT
-Registering your purchase in the Registry of approximately 0.1%
-Municipal queries about £ 200
-Object inspection engineer - approximately 600-1500 pounds (+ VAT) - is strongly recommended when buying a house, and when any mortgage required.
-Services of an independent financial broker of a mortgage loan: 1% do1.5% of the loan.  Cost of maintaining the property in contrast to what they write some "professional" Russian-language websites on foreign real estate, and unlike many other countries in the UK do not as such annual tax on property ownership. Owner of any property, however, have to pay council tax (Council Tax), which goes for police, firefighters, municipal housing, schools, libraries, street cleaning. This tax can be paid once a year, either quarterly or monthly. The amount is set by the municipality and can vary dramatically even within a single city - paradoxically, City of Westminster, which enters the heart of London, is one of the lowest municipal taxes in the country and neighboring Camden, for example, is one of the most expensive - so in Depending on the municipal tax may be from 200 pounds per year to 2.5 million per year. Each property in the UK listed in a special register, and depending on its value falls into one of eight categories (from A to H), where H is the category most expensive.
Owners of almost all the apartments and some houses also need to pay a Service Charge (service fee) - it is installed or council tenants, or managing agent, a witness for the state of the object, and can differ significantly depending on the facility and services (concierge, video cameras, garages etc.) - from 500 to 3500 per year (usually paid quarterly).
UTILITIES AND OTHER CHARGES
Housing in the UK has a counter, not only for electricity and gas, but also on the water, so the sum of utilities depends on how many people live in the apartment, and how they use heating, water and electricity.
Below the indicative amount of utility payments on the example of family living in a three-room apartment:
Gas - 30-60 pounds in a month
Electricity - 50 + pounds in a month
Water - 150 - 400 pounds per year
Property insurance - from 30 pounds a month
Internet - from £ 12 a month for unlimited ADSL line
Telephone - from £ 12 a month for line rental + cost of phone calls.
TV license - £ 130 per year. This is a compulsory payment that goes to finance the BBC. His need to pay anyone with a TV, even if he prefers to watch cable channels. Payment amount covers any number of televisions in the same apartment / house.
Satellite / Cable TV - Packages from £ 15 per month
Property taxes for non-residents - individuals
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If you are not a UK resident and real estate registered in your name:
-Tax on capital gains from real estate: Since you are not a tax resident, you pay no capital gains tax.
-Income Tax: You pay tax on any income derived from real estate (eg rent). However, if you got credit for the purchase or repair of property, the amount of interest payable on the loan, deducted from taxable income. In addition to what is deducted from the tax base all costs associated with maintenance, repair and property management.
-Inheritance Tax: In case of death, the property owner, relatives, inherited objects are required to pay inheritance tax. Tax will be levied on the amount of total capital deployed in the UK and, less certain amounts will be about 40% .0 ECW Press, please contact us to align more consultation with the tax consultant.
Banks. Credits. Mortgage
There are several ways to finance the purchase of residential property. Most banks and credit institutions, if necessary, ready to provide loan against the acquired property (mortgage).
Financing scheme should be chosen taking into account your tax status to stay in the most optimal from a tax perspective.
In London, the action of many reputable brokers and financial institutions that specialize in providing mortgages to foreign clients.
Standard loan conditions for non-residents:
Mortgages of up to 25-30 years,
Down payment - up to 25-30%
The interest rate on mortgage loans are usually for 1 - 2,5% higher than the refinancing rate of the Bank of England, which is now at a historically low level of -0.5%!
To date, the offer mortgage products to foreign buyers is limited, but their number is gradually increasing. In the current lending environment looks attractive.
Fixed interest rates for foreign property buyers are at 3.99 - 5.69% depending on term lending and credit institutions.
Our partners will help you gather the necessary documents for submission to the mortgage without leaving Russia. |
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Buying property - England