Buying a house in England: nothing is certain until exchange — and read what you're actually buying
England has two surprises you need to know beforehand. An accepted offer binds nobody: only at the exchange of contracts is the purchase real, and until that day either party can walk away. And not every "purchase" is ownership: with leasehold you buy the right to live there for a fixed number of years. On top of that comes the stamp duty, with surcharges that hit emigrants in particular: 5 percentage points extra as long as your Dutch house isn't sold, and 2 percentage points for whoever isn't yet a UK resident.
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Written and checked by Auke on , against the sources at the bottom. Is something no longer right? Report it below and I'll fix it.
Yes, you can buy a house in England, even before you live there. You then pay a surcharge. But not every "purchase" is ownership: with leasehold you buy the right to live there for a fixed number of years.
What it costs is set by Stamp Duty Land Tax, the English property transfer tax, in bands: nothing up to £125,000, then 2%, from £250,000 5%, and more above £925,000.
The finding is in the two surcharges that hit emigrants in particular:
- 5 percentage points extra as long as your Dutch house isn't sold;
- 2 percentage points for whoever is not yet a UK resident at the time of purchase.
The trap is the first phase. An accepted offer binds nobody, and until the exchange of contracts (the moment the signed contracts are swapped) either party can walk away.
In your first year you don't buy. You rent, you get to know the city, and only then do you decide — why that order is fixed. This article is for the moment you are ready. And then England starts with a lesson in patience: the offer that was just accepted means nothing yet.
When is the purchase really done?
The English process has three moments: offer accepted, exchange of contracts, and completion. GOV.UK says it in so many words: an offer is not legally binding until contracts are exchanged. An offer subject to contract means the price can still be negotiated, for example if the survey finds a problem.
Most of the work happens in that in-between phase:
- The seller draws up the contract.
- Your conveyancing solicitor, the lawyer who handles the transfer (in the Netherlands the notary does this), does the local searches: enquiries with the council and other bodies. You usually pay for those up front.
- You arrange your survey and mortgage.
Only once both parties have exchanged the signed contracts is the purchase binding. Whoever pulls out after that usually pays compensation. At completion your solicitor transfers the money and you get the keys.
Count on about five months for the whole thing, and longer if your purchase is part of a chain of buyers and sellers.
Am I buying ownership, or a lease?
Not every English "purchase" makes you the owner:
- With freehold you own the house and the land.
- With leasehold you buy the right to live there for a fixed number of years. There is a freeholder (the owner of the land) above you, and you pay annual ground rent and service charges for the building.
The line to know: with a lease that has less than 80 years remaining, mortgage lenders are more reluctant, and an extension then costs considerably more.
So ask, as the government guide advises:
- how many years remain;
- how high the ground rent is, and whether and how it rises;
- what the service charges are, now and for at least the last two years;
- which insurer insures the building.
Ask for the lease itself and have your solicitor check the answers.
What does buying a house in England cost in stamp duty?
| Portion of the price | Rate, if this becomes your only home | With the surcharge for an additional home |
|---|---|---|
| up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1.5 million | 10% | 15% |
| above £1.5 million | 12% | 17% |
An example from GOV.UK: a house of £295,000 costs £4,750 in SDLT without surcharges.
Whoever buys a home for the first time pays nothing up to £300,000 and 5% above that up to £500,000. That only applies if you and everyone you buy with are first-time buyers. Above £500,000 that relief falls away.
For emigrants the real amounts are in the surcharges:
- +5 percentage points if after the purchase you own more than one home worth £40,000 or more, anywhere in the world: your Dutch owner-occupied house counts, and married partners are assessed together. The surcharge doesn't apply if the new home replaces your main residence and your previous main residence is sold within 36 months of completing your purchase. If it isn't sold on the day of completion, you first pay the higher rate. If you sell it within three years, you claim the extra part back, at the latest twelve months after the sale or after the filing date of your return, whichever is later.
- +2 percentage points if in the 12 months before the purchase you weren't in the UK for at least 183 days. As a fresh arrival you quickly are. If after the purchase you are in the UK for at least 183 days in a continuous period of 365 days, within the two years around the purchase date, you can claim the surcharge back by amending your return.
Who arranges the payment?
The SDLT return and the payment must reach HMRC, the British tax authority, within 14 days of completion. Otherwise penalties and interest follow. If you have a solicitor, they usually do this on the day of completion itself and add the amount to their bill.
The skill here isn't in the process but in the timing. The sale of your Dutch house and your English purchase belong in one plan, and the surcharges decide which order is cheapest.
In Vertrekklaar this is phase 5 of 5 of the journey: the same steps, but then for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to England.
What this rests on
The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.
- GOV.UK — buying a home, from offer to exchange of contracts and completion — gov.uk
- GOV.UK — the SDLT rates for residential property, the 5% surcharge for additional dwellings and the 2% surcharge for non-residents — gov.uk
- HMRC — the higher rates, also if you own a home elsewhere in the world — gov.uk
- HMRC — the surcharge for non-residents, and the refund after 183 days — gov.uk
- GOV.UK — filing and paying SDLT within 14 days — gov.uk
- GOV.UK — buying or owning a leasehold home — gov.uk
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