Below is a general procedure of buying a UK Property as a non-resident. This guide is applicable to buying properties in London, Manchester, Birmingham and Liverpool.
First, select the property and unit type. Then, £500 - £1,000 is payable as a reservation fee which is non-refundable.
Sign an agreement to assign an attorney as a representative of the buyer to sign the Sales & Purchase Agreement in the United Kingdom.
After signing the Sales & Purchase Agreement, 10%-25% of the purchase price is payable by the buyer to the attorney of the developer's trust account.
6 months before handover, the foreign buyer is required to apply for mortgage. We could provide mortgage referral service to our clients.
Some of the UK properties might require the foreign buyers to pay partial amount of the purchase price 6 months after signing the contract.
When the UK property has been completed, the attorney will notify the foreign buyer to check the unit. (It can either be carried out by the attorney or local surveyors). After checking the unit, the attorney will confirm the handover date. On the day of handover, the bank will release the mortgage amount to the developer. The foreign buyer is required to transfer remaining amount of purchase price before that. When the foreign buyer gets the key, the transaction is officially completed.
When the foreign buyer has got the key, you can assign a property management company in the UK to manage your property. They can provide services such as tenant recruitment, checking and maintaining the property, paying taxes for the owner etc. The expenses will be charged directly from the rental return.
A: Foreign investors can apply for up to 70% mortgage. The interest rate can be as low as 4.25% per annum and loan period can be 25 years. (It might varies from time to time.)
- Legal Fee: The legal fee for buying/selling a UK property is around GBP£1,300 - £3,000. The foreign investors could use their own lawyers or we could refer a lawyer to you.
- Management Fee: Charged by the management company and depends on the size of the unit. Generally, it will be charged for £2 -£4 / square ft.
- Letting Fee: Will be charged when the property owner rents out its property. A 8%-10% of the monthly rent will be charged.
- Estate Agent Fees: 2% - 4% of the selling price of your UK property is payable when you sell your UK property through a local agent.
- Stamp Duty Land Tax (SDLT): One of the most expansive taxes in the United Kingdom when someone buy a property. It is normally payable after signing the contract in 30 days. The amount will vary according to the size, usage and the property right.
|Property Price (GBP£)||Rate|
|£50,000 ~ £125,000||3%|
|£125,000 ~ £250,000||5%|
|£250,000 ~ £925,000||8%|
- Ground Rent: No definite amount and varies from property to property. For example, some of the contemporary apartments will be charged for £200 - £300 per annum, whilst some of the properties owned by the UK government might only charge for £10 per annum.
- Income Tax: Non-UK residences are required to report the rental income of properties in the UK. The tax rate is charged at 20% of the rental income but foreign buyers could waive partial amount with some revenue expenses such as repairs, maintenance, insurance, management fees etc. British Passport Holder could enjoy exemption from tax for the first £11,000 or so of profit.
- Council Tax: It is not necessary to pay for the Council Tax if you rent out the property and it will be bare by the tenant. The charges vary from property to property and the exact amount will be notified by the department before the tenant moves in.
- Capital Gains Tax: 18%-28% of the profit from selling the UK property. The foreign investor must report to the HMRC within 30 days after you sold the property.
|£11,100 or below||0%|
|£11,101 - £31,800||18%|
|£31,801 or above||28%|