What’s the acronym for post-completion?
TAPE
TAPE stands for Tax, Application to Register, Proceeds received by Seller, Existing Mortgage Discharged.
Who pays Stamp Duty?
BUYERS
Buyers are responsible for paying Stamp Duty on property transactions.
How long does a Buyer have to pay Stamp Duty?
14 days after completion
This is the timeframe within which the payment must be made to HMRC.
What happens once Stamp Duty is paid?
HMRC gives a certificate, which can be sent to the Land Registry WITH the application to register
This certificate is necessary for the registration process.
How do we calculate stamp duty?
- SDLT is only paid on the property, not chattels
- First £125k = 0%
- 125-250 = 2%
- 250-925 = 5%
- 925-1.5m = 10%
- 12 above 1.5m
- Add 5% for multiple properties
Spouses are treated as one for the purpose of calculating Stamp Duty.
What is the First Time Buyer relief threshold?
- First 300k = 0%
- 300-500k = 5%
- Over 500k = NO RELIEF
To qualify, the buyer must never have owned a house and intends to occupy the property.
What should you advise the seller to consider regarding taxes?
Capital Gains Tax
The seller may be eligible for relief for private residence.
How long does a seller have to pay CGT?
60 days from completion
This is the deadline for paying Capital Gains Tax.
Who registers the transaction?
Buyer’s solicitor with land registry
Registration includes Name, Lender’s Charge, Documents, and Fee.
How quickly should the buyer register?
As soon as possible
This ensures they benefit from the priority period and avoid penalties.
When do you have to register a lease?
Over 7 years or assignment of old lease with more than 7 years to run
This is a requirement for lease registration.
What checks need to be done on the existing mortgage during completion?
- Transfer needs to be free of charges
- Need an undertaking from seller’s solicitor to discharge the other mortgage
These checks ensure that the mortgage can be transferred without issues.
What formalities does a legal mortgage need?
- Incorporate all terms
- Be in writing
- Signed as a deed
These requirements ensure the legal validity of the mortgage.
If a Mortgage fails the formalities, how might it take effect?
Equitable Mortgage
An equitable mortgage would need registration to be of value and is inferior to a legal mortgage.
What will the lender do before the security document is executed?
Conduct a Search with Priority
This is a standard procedure to ensure the lender’s security.
Once the deed is executed, what should be done?
Register it
This binds future lenders and purchasers and places a restriction to not allow a disposition without consent.
If the buyer is a company, what needs to be done?
REGISTERED AT COMPANIES HOUSE WITHIN 21 DAYS
This is a requirement for corporate buyers to ensure compliance.
If a Company fails to register the mortgage, what could happen?
Security is void against liquidators, administrators
It becomes an unsecured debt, and money secured by it becomes immediately payable.
If a breach is discovered after completion, what could happen if it is a CONDITION?
Innocent party could repudiate and claim damages
Conditions are fundamental terms of the contract.
If a breach is discovered after completion, what could happen if it is a WARRANTY?
Innocent party can claim damages but not end contract
Warranties are supporting promises in the contract.
Can you give two examples of conditions in a property sale?
- Vacant Possession
- Planning Use
Conditions are essential terms that must be met.
Can you give two examples of warranties in a property sale?
- Fixture and Fittings
- State of repair (roof repair)
Warranties are assurances regarding the condition of the property.
What might a buyer be due in case of fraudulent misrepresentation?
- Rescission
- Damages
The seller knew the representation was untrue.
What might a buyer be due in case of negligent misrepresentation?
- Rescission at court discretion
- Damages
This occurs when the seller fails to take reasonable care.
