Transfer Tax

This topic is widely misunderstood so to keep it simple to understand the best way is to call it by its official name – Transfer Fee /Tax.

Basically this is a tax imposed by the Land Registry each and every time the property changes ownership.

Bearing in mind the first buyer when he buys the property is classed as the Beneficial Owner so he is not required to pay the Transfer fee until the actual separate title deed is ready ( which could be anything from 2- 12 years! ). If in the meantime he decides to sell he can assign his rights to the new buyer (with the seller paying an assignment fee to the Land Registry for this service) by way of an assignment contract and the new buyer then will pay the Transfer Tax when the separate Deeds are ready in order to have them Transferred into their names and then they become the legal owner.

If you are buying the property and the deeds are already in the name of the owner then you will be entering into a sales contract with them and when the sale completes you will be asked to pay the Transfer Fee to the Land Registry office on the day of completion.
In 2016 the Land Registry are offering a 50% discount on the Transfer Tax where the property is bought without VAT being applied ( i.e. in the case of Resale Property) and the Transfer Tax will be waived all together where the sales price has VAT applied  - ie a new property from a Developer when the actual Title deeds are ready