There are three main taxes which must be paid. The first is a 0.5% stamp duty (current at July 2014) if paid within one month of the contract date. Please note, this is currently a very low rate – so we recommend buying sooner rather than later as this rate may rise. If it is not paid within this time, it increases until it becomes 1.5% if paid after 6 months. You will have the option to pay upfront or pay on transfer of title and pay a higher rate.
Once your purchase permission has been granted, your legal advisor will notify you and then fill out all of the necessary land registry valuation forms for the valuation of the property. It is usually at this point that taxes will be payable. The taxes are Transfer of Title Fee (again currently very low at initial 1% option for your first purchase). This is a % of the contract sale price. In addition, if you are buying a brand new property from a developer, you will usually have to pay 5% VAT to the government.
For more detailed information on taxes, please ask us for a copy of our guide to the taxes payable on property transactions.