Disbursements on a conveyancing quote and why they add up

Disbursements are the third-party costs your conveyancer pays on your behalf and passes on to you, separate from their own fee. In conveyancing they cover things like property searches, Land Registry fees and tax, and together they can make a quote look very different from the legal fee you were first told about.

This guide explains where each disbursement comes from, which ones are fixed and which ones vary, when you pay them and how VAT works. It applies to England and Wales, and it is written to help you compare quotes on the full cost rather than the headline fee.

What counts as a disbursement

A disbursement is money your conveyancer pays to someone else because your transaction needs it. The money goes to a public body, a search provider or a freeholder, not to the conveyancer, and a true disbursement is passed on at the amount the third party charged.

The legal fee is different. That is what the firm charges for its own work, such as checking the contract, raising enquiries and reporting to you. If a charge on your quote is the firm's own administration cost, it belongs with the legal fee, even if it sits under a disbursements heading.

You may also see the same costs called a disbursement fee on an invoice. Whatever the label, the useful question is who the money is paid to.

Why disbursements add up

Most single items look small. The total grows because a purchase needs several of them at once, and they are set in different ways. The table groups them by who decides the price.

Search-pack costs vary depending on the property, location and searches required. Additional checks and official copies can increase the total, so ask your conveyancer to provide an itemised estimate.

For a line-by-line explanation of each item, our guide to conveyancing disbursements goes through them in turn, and our shorter list of typical disbursement costs shows what to expect on a buy, a sale and a remortgage.

Land Registry fees follow a fixed scale

For a standard purchase involving the transfer of a whole registered title, HM Land Registry charges a registration fee based on the purchase price and application method. Different fees can apply to first registrations, transfers of part and certain other applications.

For a purchase of a registered property, applied for electronically, the current Scale 1 fees are:

Applications made by post cost more, for example £330 in the £200,001 to £500,000 band.

If you buy with a mortgage, there is no extra Land Registry fee for registering the lender's charge when it is lodged with your purchase. On a remortgage, the new charge is assessed on the loan amount under a separate, lower scale, and there is no fee to register the discharge of your old mortgage. Registering is something your conveyancer handles for you after completion.

Searches and other costs that depend on the property

Searches are where disbursements vary most between two similar houses. Your conveyancer orders the ones your property and lender require, so a flat in a flood zone or a house in a former mining area will cost more than a standard search pack suggests.

A freehold house in a quiet area may need only the core searches. A leasehold flat adds fees charged by the freeholder or managing agent, and a new build can add costs on the developer's side.

Our guide to conveyancing searches explains what each search checks and why a lender might insist on it.

When you pay disbursements

You do not usually pay everything at once. Many firms ask for money on account at the start to cover identity checks, bankruptcy searches and the search pack, because those are ordered early. Land Registry fees and Stamp Duty Land Tax are normally settled towards completion.

Stamp Duty Land Tax is a tax rather than a service fee, but it is usually listed with disbursements because your conveyancer files the return and pays HMRC for you, usually within 14 days of completion, although the legal deadline runs from the effective date of the transaction. Rates and thresholds change, so check them before you budget. Our guide to Stamp Duty Land Tax is a starting point.

VAT and disbursements on your invoice

Your conveyancer's own fee carries VAT. Disbursements are treated differently, but not always in the way people expect.

HMRC allows a payment to be treated as a disbursement for VAT purposes only where specific conditions are met. These include the firm acting as your agent, paying for goods or services supplied to you rather than to the firm, having your permission, passing on the exact cost and showing it separately on the invoice. Not every third-party charge qualifies. When those conditions are met, the firm does not charge VAT on top. HM Land Registry statutory fees carry no VAT.

Some costs fall outside that test. HMRC's guidance gives a bank transfer fee as an example of a cost that is a recharge, not a disbursement, which means VAT can apply to it. So VAT on disbursements depends on the item. If a line on your quote shows VAT and you cannot tell why, ask the firm to explain it before you instruct.

Questions to ask before you instruct

A good quote makes the disbursements easy to check. Before you accept one, it helps to ask:

• Is every disbursement listed as its own line, with an amount?
• Which amounts are fixed and which are estimates that could change after the searches come back?
• Which searches does my property and lender need, and are they all included?
• Do the Land Registry fee and Stamp Duty Land Tax appear in the total?
• Which items are due at the start and which at completion?
• Is VAT shown on any disbursement, and why?

If a quote gives one combined figure for disbursements, ask for the breakdown. Two firms quoting the same legal fee can still end up with different totals once disbursements are included, so the total is the number to compare.

Comparing quotes on the full cost

Because disbursements are largely outside a firm's control, the real differences between quotes sit in the legal fee, the extras a firm adds and how clearly the figures are shown. Putting the full cost side by side is the quickest way to see that.

When you compare fixed-fee conveyancing quotes, look at the total including disbursements and VAT, not only the headline fee.

Our guides to conveyancing fees when buying and when selling show how the pieces fit together, and prices differ by area, so it can help to check your own city, for example Leeds or Liverpool.

Questions people ask about disbursements

What are disbursements in conveyancing?

They are the costs your conveyancer pays to third parties on your behalf, such as search providers, HM Land Registry and HMRC, and then passes on to you. They are separate from the firm's own legal fee.

What are disbursements when buying a house?

On a purchase they usually include a search pack, bankruptcy and identity checks, office copies of the title, the Land Registry registration fee and Stamp Duty Land Tax. A leasehold purchase adds fees charged by the freeholder. Your conveyancer may also charge for bank transfers, but this is not necessarily treated as a disbursement for VAT purposes.

What are disbursements when selling a house?

Fewer apply to a sale. Typical items are office copies of the title and identity checks. If you sell a leasehold property, you may also pay for information from the freeholder or managing agent. Your conveyancer may also charge for bank transfers, but this is not necessarily treated as a disbursement for VAT purposes.

What are disbursements in law?

In law, a disbursement is an expense a professional pays on a client's behalf and recovers from them. In property work that means search fees, registration fees and similar third-party costs, shown separately from the professional's own fee.

What are legal disbursements?

It is another way of describing the same thing. Legal disbursements are the out-of-pocket costs a solicitor or conveyancer pays for you during a matter, which are charged on top of their fee.