3.4 Additional costs of buying a home
Apart from a deposit, homebuyers need to budget for a range of other upfront costs. The largest are usually any purchase taxes (such as Stamp Duty in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland, Land Transactions Tax in Wales and similar taxes in other countries), and valuation and legal fees. There may also be a fee for arranging a mortgage that can either be paid upfront or added to the loan.
Taken together, these additional costs can be substantial – for example, equivalent to another 5 to 15% of the value of the property, so must be estimated and planned for.
Box 3 Property purchase taxes in the UK
Governments in the UK provide calculators to help you work out the purchase tax that may be payable when you buy a home. You can find the calculators at the following links:
Having made the purchase, the main ongoing cost is the mortgage payments. However, the lender will also insist that the building is insured, since the mortgage is secured against the property.
OpenLearn - Rent or buy? The challenge of access to housing
Except for third party materials and otherwise, this content is made available under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 Licence, full copyright detail can be found in the acknowledgements section. Please see full copyright statement for details.