If you're looking to buy a seven-figure property, it's worth taking a look at how much it will cost to purchase and run it before taking the plunge.
1. A £1m home will cost you more than £40,000 in tax
Stamp duty is the tax paid on all homes bought in England and Northern Ireland.
The amount you pay goes up the more expensive your property is:
| Property price | Stamp Duty percentage to pay |
|---|---|
| £0 – £250,000 | 0% |
| £250,000 - £925,000 | 5% |
| £925,000 - £1,500,000 | 10% |
| £1,500,000+ | 12% |
Tax on homes of between £925,001 to £1.5m is charged at 10%. But that doesn’t mean a £1m home will cost you £100,000 (10% of £1m) in tax.
Instead, you’ll pay between 0% and 5% in stamp duty until you reach the £925,000 threshold.
For the portion of the price above £925,000, you’ll pay 10% in stamp duty. If it's over £1.5m, then that goes up to 12% for the portion above that.
So, for a £1m home, you can expect to pay £41,250 in stamp duty land tax.
Here's how that's worked out:
| Stamp duty on £1m home | Fees |
|---|---|
| Up to £250,000 | £0 |
| Above £250,000 and up to £925,000 | £33,750 |
| Above £925,000 and up to £1.5m | £7,500 |
| Above £1.5m | £0 |
| Total due | £41,250 |
And if your million-pound property is a second home, stamp duty is more expensive still. You'll be charged an extra 3% on the whole price. That's a further £30,000 fee.
You can find out more about higher rates of stamp duty in our guide.
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2. Legal fees on a £1m house will cost you more than £2,000
You'll need to recruit a property lawyer, known as a conveyancer, to carry out the legal work involved in buying any property.
The higher the value of your home, the more your conveyancer is likely to cost.
Budget for around £1,800 for the solicitor, and an additional £500 for disbursements, such as local and Land Registry searches.
Find out what a conveyancer does and why you need one in our guide.
3. A survey on a £1m home will cost around £1,000
If you’re buying a very expensive home, you’ll want to make sure your money is safe. Which is why it’s a good idea to have an extensive survey of the property.
A survey is basically a health check on a property. If it reveals any problems, it puts you in a position to ask the seller to fix them before you proceed with the purchase.
It’s not a legal requirement to commission a survey on a property you're buying, but it could end up saving you thousands of pounds in the long run.
RICS currently offers three types of home-buyer survey, with Level 1 being the most basic and Level 3 being the most comprehensive. They're called:
A Condition Report (or Level 1 Survey - £400 - £950)
A HomeBuyer Report (or Level 2 Survey - £400 - £1,000)
A Building Survey (or Level 3 survey - £750 - £1500)
Costs for a fully-fledged Building Survey start at about £750.
If it highlights any issues, you may want to commission further, more detailed surveys which will cost extra. These might cover things like damp, any structural defects, or Japanese knotweed.
What type of survey do I need when buying a house?
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4. Running costs on a £1m house are around £500 to £800 a month
Mortgage aside, it’s easy to get an estimate for how much a £1m (or any other value) home will cost to run.
At the bottom of any property listing on Zoopla you can find the estimated running costs, including council tax, energy, water and home insurance.
These costs will vary widely, depending on the type of house and your location. But for the average £1m home, we estimate this is likely to be around £300 to £500 a month (when energy prices are at normal levels).
Also, the more house you own, the more it is likely to cost to keep in good repair. So make sure you have some capacity to pay for any unexpected issues or to spruce up the interior.
Not all £1m homes are huge. But if you're buying a big house with a large garden and lots of rooms, chances are you'll need some help looking after your new pad.
We estimate a sensible monthly budget (to cover a gardener, cleaner and window cleaner, for example) is about £300.
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