Authored by the expert who managed and guided the team behind the United Kingdom Property Pack
Yes, the analysis of London's property market is included in our pack
Buying property in London as a foreigner comes with a unique set of costs, taxes, and fees that can catch many buyers off guard if they do not prepare properly.
This guide breaks down everything you need to budget for in 2026, from Stamp Duty Land Tax to conveyancing solicitor fees and ongoing ownership costs.
We constantly update this blog post to reflect the latest rules, rates, and market conditions so you always have accurate information at your fingertips.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in London.
Overall, how much extra should I budget on top of the purchase price in London in 2026?
How much are total buyer closing costs in London in 2026?
As of early 2026, total buyer closing costs in London typically range from 2% to 7% of the purchase price for most buyers, but this can rise to 10% to 15% or more if you are a non-UK resident or purchasing an additional property and face the SDLT surcharges.
The minimum extra budget for closing costs in London, when keeping expenses to the bare legal minimum and assuming no Stamp Duty Land Tax applies, is around £1,800 to £3,500 (about $2,300 to $4,400 or €2,100 to €4,100), which covers a basic conveyancing solicitor, searches, and the Land Registry fee.
The maximum extra budget buyers should realistically plan for in London can reach 15% or more of the purchase price when accounting for full SDLT at the highest rates, the 2% non-resident surcharge, the 5% additional property surcharge, plus higher conveyancing fees for complex leasehold or new-build transactions.
The main factors that determine whether your closing costs fall at the low end or high end in London include the purchase price and which SDLT brackets apply, whether you qualify for first-time buyer relief, your UK residency status, whether you already own another property anywhere in the world, and whether the property is freehold or leasehold.
What's the usual total % of fees and taxes over the purchase price in London?
The usual total percentage of fees and taxes over the purchase price in London for a straightforward buyer is around 3% to 6%, but this can go higher depending on your personal circumstances and the property price.
The realistic low-to-high percentage range that covers most standard property transactions in London is approximately 0.5% to 1.5% when SDLT is zero, 2% to 7% when SDLT applies without surcharges, and 8% to 15% or more when the non-resident and additional property surcharges both apply.
The portion going to government taxes is typically much larger than professional service fees in London, with SDLT often representing 80% to 90% of total closing costs, while conveyancing solicitor fees, searches, and Land Registry fees together usually amount to only a few thousand pounds.
By the way, you will find much more detailed data in our property pack covering the real estate market in London.
What costs are always mandatory when buying in London in 2026?
As of early 2026, the mandatory costs when buying property in London include Stamp Duty Land Tax if your purchase price and situation trigger it, a conveyancing solicitor to handle the legal transfer, the HM Land Registry registration fee, basic property searches and checks, and bank transfer fees along with anti-money laundering ID verification.
Optional but highly recommended costs for buyers in London include a RICS survey at Level 2 or Level 3 (especially important for older London housing stock and conversions), specialist reports for damp, roof, structural issues, or fire safety and cladding in blocks, and tax advice if you are a non-resident or considering a company structure.
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What taxes do I pay when buying a property in London in 2026?
What is the property transfer tax rate in London in 2026?
As of early 2026, the property transfer tax in London is called Stamp Duty Land Tax (SDLT), and the main residential rates are 0% up to £125,000, then 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million, and 12% above £1.5 million.
Yes, there are extra transfer taxes for foreigners buying property in London: non-UK residents pay an additional 2% surcharge on top of the standard SDLT rates, which means a foreign buyer purchasing a £500,000 London flat would pay around £2,500 more in SDLT than a UK resident.
Buyers generally do not pay VAT on the purchase price of a normal residential property in London because most residential sales are either exempt or zero-rated for VAT purposes, although VAT at 20% does apply to the professional services you purchase such as solicitor fees and surveys.
You pay Stamp Duty Land Tax in London at or just after completion of the purchase, and your conveyancing solicitor typically handles filing the SDLT return and paying the tax to HMRC on your behalf within 14 days.
Are there tax exemptions or reduced rates for first-time buyers in London?
Yes, first-time buyers in London can benefit from SDLT relief that provides 0% tax up to £300,000 and 5% on the portion from £300,001 to £500,000, but this relief does not apply if the property price exceeds £500,000.
Taxes change significantly if you buy property through a company in London because corporate purchasers can face a flat higher SDLT rate on some purchases, potential exposure to the Annual Tax on Enveloped Dwellings (ATED), and potentially punitive rates of up to 17% on higher-value properties.
There is no tax difference between buying a new-build property versus a resale property in London in terms of SDLT rates, as the same rate table applies regardless of whether the home is newly constructed or previously owned.
To qualify for first-time buyer relief in London, you must never have owned a residential property anywhere in the world before, and if you are buying jointly, all purchasers must meet this condition.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UK versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
Which professional fees will I pay as a buyer in London in 2026?
How much does a notary or conveyancing lawyer cost in London in 2026?
As of early 2026, conveyancing solicitor fees for buying a property in London typically range from £1,500 to £3,500 plus VAT (about $1,900 to $4,400 or €1,750 to €4,100), with complex leasehold, new-build, or high-value transactions often reaching £2,500 to £5,000 plus VAT.
Conveyancing fees in London are usually charged as a fixed fee for the legal work, but disbursements like Land Registry fees and searches are separate additional costs that your solicitor pays on your behalf.
Translation or interpreter services for foreign buyers in London typically cost around £30 to £80 (about $40 to $100 or €35 to €95) per page for certified translations, while live interpreter services can run £200 to £600 (about $250 to $750 or €230 to €700) per day depending on the language.
A tax advisor in London is not mandatory for a straightforward personal purchase but is recommended if you are non-resident or considering company ownership, with basic planning costing around £300 to £1,500 (about $375 to $1,900 or €350 to €1,750) and more for complex structuring advice.
We have a whole part dedicated to these topics in our our real estate pack about London.
What's the typical real estate agent fee in London in 2026?
As of early 2026, the typical real estate agent fee in London is around 1% to 2% of the sale price including VAT, but as a buyer you generally pay nothing because the seller covers this cost in the UK.
In London, the seller pays the estate agent's commission rather than the buyer, which is the opposite of how it works in some other countries where buyers share or fully pay agent fees.
If you choose to hire a buyer's agent in London (less common but used in prime areas), expect to pay around 1% to 2% of the purchase price for a full-service search and negotiation service, or a lower fixed fee for limited scope assistance.
How much do legal checks cost (title, liens, permits) in London?
Legal checks in London including the local authority search, water and drainage search, environmental search, and other standard searches typically cost around £200 to £450 (about $250 to $570 or €230 to €530) as a bundled disbursement paid through your solicitor.
A property valuation fee in London can range from £0 when included free with certain mortgage products to around £300 to £800 (about $375 to $1,000 or €350 to €940) for a standalone valuation, while a full RICS survey costs £400 to £1,500 or more depending on property size and survey level.
The most critical legal check that should never be skipped in London is the local authority search, which reveals planning restrictions, building control issues, and any enforcement actions that could severely affect your property's value and usability.
Buying a property with hidden issues is something we mention in our list of risks and pitfalls people face when buying real estate in London.
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What hidden or surprise costs should I watch for in London right now?
What are the most common unexpected fees buyers discover in London?
The most common unexpected fees buyers discover in London include leasehold administration charges (typically £300 to £1,200 for Notice of Assignment, Notice of Charge, Deed of Covenant, and management company transfers), service charge apportionment where you reimburse the seller for prepaid charges, and the discovery of upcoming major works in a building that were not obvious during viewings.
Yes, while you do not inherit the seller's council tax debt, in leasehold properties you can get caught by service charge arrears disputes or upcoming major works contributions that only become clear once the management pack and LPE1 information arrives.
Buyers do get scammed in London, most commonly through fake solicitor details, spoofed emails with fraudulent bank account numbers, or impersonation of legitimate professionals, so you should always verify bank details through a trusted separate channel and check your solicitor is genuine on the SRA register.
The fees usually not disclosed upfront by sellers or agents in London are leasehold administration fees and future major works contributions, which often only become apparent once the solicitor receives the management pack partway through the transaction.
In our property pack covering the property buying process in London, we go into details so you can avoid these pitfalls.
Are there extra fees if the property has a tenant in London?
If the property has a tenant in London, you may face extra legal complexity costs of around £500 to £2,000 (about $630 to $2,500 or €580 to €2,350) for additional solicitor time, handling of the rent deposit, and potential timing delays that can trigger extra mortgage offer extension or bridging finance costs.
When purchasing a tenanted property in London, the buyer inherits the existing tenancy agreement and becomes the new landlord, taking on all legal obligations including protecting the deposit in a government-approved scheme and complying with landlord licensing requirements in certain boroughs.
It is generally not possible to terminate an existing Assured Shorthold Tenancy immediately after purchase in London because you must follow proper notice procedures, which typically require a minimum of two months' notice under Section 21 or appropriate grounds under Section 8.
A sitting tenant in London can affect the property's market value, often resulting in a discount of 10% to 20% or more compared to vacant possession, but this can actually be advantageous for investors seeking immediate rental income.
If you want to optimize your rental strategy, you can read our complete guide on how to buy and rent out in London.
We have made this infographic to give you a quick and clear snapshot of the property market in the UK. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which fees are negotiable, and who really pays what in London?
Which closing costs are negotiable in London right now?
The closing costs that are negotiable in London include the conveyancing solicitor's legal fee (you can shop around and compare quotes), the survey level and scope (you choose between Level 2 and Level 3), and mortgage product fees where you can sometimes opt for a fee-free product with a slightly higher interest rate.
The closing costs that are fixed by law or regulation and cannot be negotiated in London include Stamp Duty Land Tax (it is a government tax with set rates), Land Registry registration fees (published on a fixed schedule), and search fees to local authorities (set by each council).
The typical discount or reduction buyers can realistically achieve on negotiable fees in London is around £200 to £500 on conveyancing by shopping around, and potentially significant savings on mortgage arrangement fees by choosing the right product for your situation.
Can I ask the seller to cover some closing costs in London?
The likelihood that a seller will agree to cover some closing costs in London depends heavily on market conditions, with early 2026 showing buyer-friendly conditions in many segments due to high supply and longer marketing periods, making sellers more willing to negotiate.
The specific closing costs sellers in London are most commonly willing to cover include price reductions to offset SDLT, contributions toward known repairs identified in surveys, and sometimes service charge arrears or upcoming major works contributions in leasehold blocks.
Sellers are more likely to accept covering closing costs in London when the property has been on the market for a long time, when there is high supply in the local area, when the buyer is chain-free with finances in place, or when the broader market is cooling as it is in early 2026.
Is price bargaining common in London in 2026?
As of early 2026, price bargaining is common and expected in London because the market is showing high supply levels, a significant proportion of listings have had price reductions, and buyer demand remains subdued in many segments.
Buyers in London typically negotiate around 2% to 5% below asking price in most areas, with discounts of 5% to 10% achievable on overpriced properties, longer-on-market listings, and prime central flats, while hot micro-markets near top schools may see only 0% to 2% discounts.
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What monthly, quarterly or annual costs will I pay as an owner in London?
What's the realistic monthly owner budget in London right now?
The realistic monthly owner budget in London, excluding your mortgage payment, typically ranges from £300 to £800 (about $375 to $1,000 or €350 to €940) per month for most properties, covering council tax, service charges for flats, insurance, and a maintenance reserve.
The main recurring expense categories that make up this monthly budget in London include council tax (commonly £150 to £350 per month depending on borough and band), service charges for leasehold flats (often £150 to £400 or more per month), ground rent for leasehold properties, buildings insurance (often bundled for flats), and a sensible maintenance reserve.
The realistic low-to-high range for monthly owner costs in London is around £200 to £400 (about $250 to $500 or €230 to €470) per month for a freehold house in an outer borough, rising to £500 to £1,000 or more (about $630 to $1,250 or €580 to €1,170) per month for a leasehold flat with concierge and amenities in a prime location.
The monthly cost that tends to vary the most in London is the service charge for leasehold flats, which can differ dramatically based on building age, amenities like lifts, gyms, and concierge services, upcoming major works, and how well the management company controls costs.
You can see how this budget affect your gross and rental yields in London here.
What is the annual property tax amount in London in 2026?
As of early 2026, the annual property tax for owner-occupiers in London is Council Tax, which averages around £1,982 (about $2,500 or €2,320) per year for a Band D property across London boroughs, though this varies significantly by borough and your property's valuation band.
The realistic low-to-high range for annual Council Tax in London is roughly £1,100 to £3,500 (about $1,380 to $4,400 or €1,290 to €4,100) per year, with some inner London boroughs like Wandsworth and Westminster historically having lower rates and outer boroughs like Havering and Barking having higher rates.
Council Tax in London is calculated based on your property's valuation band (from Band A to Band H), which was set according to 1991 property values, and then multiplied by the rate set by your local borough council plus precepts for the Greater London Authority and other services.
Exemptions and reductions available for Council Tax in London include a 25% discount for single-person households, full exemptions for full-time students, Council Tax Reduction for those on low income, and exemptions for certain unoccupied properties for limited periods.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the UK. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
If I rent it out, what extra taxes and fees apply in London in 2026?
What tax rate applies to rental income in London in 2026?
As of early 2026, rental income from London property is taxed under UK Income Tax rules at your marginal rate, which means 20% for basic rate taxpayers, 40% for higher rate, and 45% for additional rate, with the first £12,570 of total income covered by the personal allowance if unused.
Yes, landlords in London can deduct certain allowable expenses from rental income before calculating tax, including property repairs, management fees, insurance, letting agent costs, and accountant fees, though mortgage interest is now restricted to a 20% tax credit rather than full deduction.
The realistic effective tax rate after deductions for typical landlords in London ranges from around 15% to 35% of gross rental income, depending on your overall income level, the expenses you can legitimately deduct, and how much mortgage interest you pay.
Foreign property owners in London do not pay a different rental income tax rate, but under the Non-Resident Landlords Scheme (NRLS), tax may be withheld at source from rent by your letting agent or tenant unless you register with HMRC and receive approval to receive rent gross.
Do I pay tax on short-term rentals in London in 2026?
As of early 2026, yes, you pay income tax on short-term rental income from London property in the same way as long-term rental income, plus London has a unique 90-night rule that creates additional planning permission risk if you exceed this limit.
Short-term rental income in London is taxed as property income just like long-term rental income, but the practical difference is that in London specifically you need planning permission to short-let your home for more than 90 nights in a calendar year, and breaching this can result in enforcement action and fines from your local council.
There is a £7,500 per year Rent a Room relief available if you let furnished accommodation in your main home and share occupancy with your guests, which can be useful for some short-term letting arrangements.
For more information about Airbnb and short-term rentals in London, you can refer to our detailed resources and the official Greater London Authority guidance.
If I sell later, what taxes and fees will I pay in London in 2026?
What's the total cost of selling as a % of price in London in 2026?
As of early 2026, the total cost of selling a property in London typically ranges from 1.5% to 3% of the sale price, not including any early mortgage repayment charge that may apply if you exit your mortgage deal early.
The realistic low-to-high percentage range for total selling costs in London is around 1% to 4%, with the low end applying to straightforward sales with competitive agent fees and the high end applying to prime properties, complex leaseholds, or situations requiring extensive preparation.
The specific cost categories that make up the total selling cost in London include estate agent commission (typically 1% to 2% including VAT), seller conveyancing solicitor fees (around £800 to £2,000 plus VAT), Energy Performance Certificate (around £50 to £100), and any preparation, repairs, or staging costs.
The single cost that is usually the largest contributor to selling expenses in London is the estate agent commission, which at 1% to 2% of a typical London sale price of £500,000 or more represents several thousand pounds and dwarfs other professional fees.
What capital gains tax applies when selling in London in 2026?
As of early 2026, if the London property is not your main residence, Capital Gains Tax applies at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers on residential property gains, calculated on the profit after deducting allowable costs.
The main exemption to Capital Gains Tax in London is Principal Private Residence Relief, which means if the property has been your only or main home throughout ownership, you typically pay no CGT at all, although letting relief and other partial reliefs may apply in mixed-use scenarios.
Foreigners selling property in London do not pay a different Capital Gains Tax rate, but non-UK residents are still within the UK CGT reporting rules for UK property disposals and must report and pay any CGT due through HMRC's property reporting process within 60 days of completion.
Capital Gains Tax in London is calculated as the sale price minus the original purchase price, minus allowable costs such as Stamp Duty paid on purchase, legal fees, and qualifying improvement costs, with the resulting gain then taxed at the applicable CGT rate after using any remaining annual exempt amount.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about London, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source Name | Why It's Authoritative | How We Used It |
|---|---|---|
| HMRC - Stamp Duty Land Tax Rates | It's the official government rulebook for property transfer tax in England. | We used it to pull the exact SDLT brackets and first-time buyer relief rules. We then applied those brackets to show realistic closing cost ranges for different London price points. |
| HMRC - Non-Resident SDLT Surcharge | It's the official guidance for the additional 2% foreigners pay. | We used it to answer whether foreigners pay extra transfer tax in London. We then incorporated the surcharge into our budgeting ranges and examples. |
| HM Land Registry - Registration Fees | It's the official fee schedule for registering property ownership. | We used it to estimate the Land Registry fee buyers pay after completion. We also used it to separate government fees from professional service costs. |
| UK Government - Council Tax Statistics 2025-26 | It's official statistics showing what councils actually charge this year. | We used it to anchor a realistic annual ownership cost baseline for London buyers. We then explained how different London boroughs can sit above or below the average. |
| RICS - Home Survey Costs and Types | RICS is the UK's leading professional body for surveyors. | We used it to set credible price ranges for property surveys in London. We also used it to explain which survey level fits different types of London properties. |
| Compare My Move - London Conveyancing Fees | It aggregates real conveyancing quotes from verified UK solicitors. | We used it to provide accurate London-specific conveyancing cost ranges. We cross-referenced their data with other sources to ensure reliability. |
| HomeOwners Alliance - Conveyancing Fees | It's a trusted independent consumer guide for UK homeowners. | We used it to validate conveyancing cost estimates and explain fee structures. We also referenced their guidance on searches and legal checks. |
| Solicitors Regulation Authority - Scam Alerts | The SRA is the regulator of solicitors in England and Wales. | We used it to describe common property transaction scam patterns in London. We then turned that into practical advice on how buyers can protect themselves. |
| Hamptons - Service Charge Index | Hamptons is an established national estate agency with transparent data. | We used it to provide grounded estimates for typical annual service charges on leasehold flats. We then translated that into realistic monthly owner budget ranges. |
| Rightmove - House Price Index | Rightmove is the UK's largest property portal with widely cited market data. | We used it to support our analysis of negotiation dynamics in early 2026. We then turned that into practical price bargaining guidance for London buyers. |
| London.gov.uk - 90-Night Rule Guidance | It's the Greater London Authority's official guidance on short-term letting. | We used it to highlight the London-specific 90-night limit that affects short-term rental income. We then tied it to the planning permission risks foreign investors should know about. |
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