Cost of buying a house

When you buy a house in Scotland, you need to engage a solicitor to deal with the legal work. Also, when you are thinking about buying a house, it is important to budget for the costs of your house purchase. These will be costs you incur over and above the price you pay for the house.

Our aim is to provide a fixed fee house purchase fee which is dependent on the purchase price of the house. The minimum fee we charge for house purchase is £800.00 (exclusive of VAT). This means the cost of our fee, inclusive of VAT is £960.00. For more expensive properties, our fee will be increased accordingly. We will, of course, provide you with a detailed note of our fee and outlays with our Terms of Engagement letter you will receive when you engage our services.

You should, however, be aware that the fee we charge is only part of the costs involved in the house purchase process. Whilst we collect these costs, we have to then pay them over to third parties. We have no control over the costs and these vary depending on the price you pay for the house. Please ensure if you are seeking a note of the costs for buying a house that you receive a note of the full costs and not simply the fee for the legal work involved.

The additional costs of buying a house

In order to provide an indication of the likely costs of buying a house, we will base the following example on a purchase price of £180,000. Once you have told us the price you expect to pay we will send you a detailed breakdown of all the costs involved.

Here is the example:

Land & Building Transaction Tax (LBTT)

*Land & Buildings Transaction Tax (LBTT) is a tiered tax payable for any purchase where the price is more than £145,000. It only applies when you buy a house and the buyer pays this cost. LBTT would be payable on this purchase – in this case it would be a charge of 2%. This is shown in the above example.

You should also be aware that first-time buyers have a higher nil rate band of £175,000 which means that a first-time buyer purchasing a property for this price would pay £100.00 in LBTT.

LBTT increases as the price of the house increased.

For the LBTT calculation, we have taken the price (£180,000) and calculated the LBTT at 2% of the difference (£35,000) to arrive at our figure of £700.00.

To work out how much LBTT you’ll have to pay, please use the Revenue Scotland LBTT Calculator by clicking here.

Additional Dwelling Supplement (ADS)

If you own another residential property, whether that’s in Scotland or anywhere else in the world, you will need to pay the Additional Dwelling Supplement (ADS). If you haven’t yet sold your existing house by the time you settle the purchase of your new house, the ADS will apply. If this happens, you can reclaim the ADS once you sell your existing house provided the sale completes within 3 years from the date of settlement of your purchase. However, it’s important to understand you must pay this before you can buy your new home. ADS is charged at 8% on the full purchase price of the house (on all properties where the price is more than £40,000). This is payable in addition to any Land & Buildings Transaction Tax (LBTT) due. If you find yourself in this position, it’s very important that you budget for this additional tax.

Registration Dues

# Registration Dues of Disposition. The Disposition is the deed that transfers ownership of the property to you. The cost of having the deed registered in the Land Register is on a sliding scale based on price. The registration dues of the Disposition can be found here.

** When you take out a mortgage to help finance your house purchase, you need to grant a Standard Security in favour of your Lender. This secures the Lender’s interest in the property. Registration Dues of Standard Security are the cost of registration of the Standard Security in the Land Register of Scotland.

What we do in the house purchase process?

When we deal with the legal work involved when a client buys a house, there are essential steps we need to take. These result in the title being successfully transferred to our client and the keys being handed over on the date of entry. Here are the steps we take:

• Receiving your instructions and giving you advice
• Dealing with anti-money laundering checks in compliance with regulations
• Creating and sending the offer to buy to the selling agent
• Negotiating the contract of sale and purchase (missives)
• Conducting an examination of the title of the property and reporting to you
• Raising observations on title with the seller’s solicitor
• Reviewing search, mining (if appropriate) and local authority reports
• Drafting the Disposition which transfers ownership of the title to you
• For clients buying with a mortgage:
  • drafting the Standard Security, reporting to you on its purpose and having you sign this
  • submitting Certificate of Title to the lender and requisitioning loan funds
• Sending you a completion statement in advance of settlement
• Obtaining your deposit (in the event of this being required)
• Completing the purchase with the seller’s solicitor and arranging release of keys to you
• Submitting the Disposition (and Standard Security, if appropriate) to the Registers of Scotland to transfer the title into your name
• Reporting on completion to you and providing an accounting in the transaction

In what circumstances might the fee increase?

Our fixed fee takes account of all the steps outlined above. However, in a small number of purchases, we need to carry out additional work to ensure successful completion. Such issues may be:

• Resolving problems with alterations having been carried out without certification
• Title boundaries not being aligned with the physical boundaries
• Access problems or problems with discharge from septic tanks
• Engagement with other solicitors in help to buy purchases

These are just some examples of issues which we might face when dealing with a purchase transaction for a client. This list is not exhaustive. If we do encounter an issue, we will explain the problem to you and make recommendations for its resolution. If possible, we will also advise you of the likely costs in dealing with the resolution of the problem.

When we need to do this additional work to successfully complete your purchase, a charge will be made based on the time taken to resolve the issue. In addition, the hourly charge is based on the level of the fee earner who carries out the work as outlined in the following table:

We are pleased to provide a detailed breakdown of the cost of your purchase once we know the proposed purchase price of the property. If you would like more information, please contact us.