Difference between fixtures and fittings (chattels)
When you come to sell a property, you’ll be asked to fill in lots of forms, to tell your solicitor all about the house and the land, which information they can pass on to the purchaser. If you are the purchaser, you’ll be asked to look closely at this information to make sure you are clear on what you are buying.
As a seller, one of the questions you’ll be asked is what you are leaving behind and what you are taking with you. Some things will be obvious, such as freestanding furniture. Some things might be less obvious such as light fittings. You might also be asked if you have agreed to sell any items to the purchaser that you might otherwise have taken with, such as the fridge or the washing machine. Curtains and carpets can also sometimes be separate items.
What are the differences between fixtures and fittings?
Items within the property have different categories. They are usually known as either fixtures and fittings, or chattels. Knowing which is which can be quite important.
A fixture is deemed to form part of the land or building, such as a fitted kitchen. A fitting (chattel) retains its independence and can be removed such as a free standing cooker. Most importantly, a chattel does not pass onto the purchaser when the land or building is sold. So, if the kitchen is a fixture, and you took part of it with you when you moved out, the purchaser would have the right to complain.
There are two basic tests to distinguish a fixture from a chattel. It is important to be clear on what something is, so you don’t take with an item that no longer belongs to you after the sale.
Test one: degree of annexation
This depends upon how firmly an object is fastened or fixed to a property. The greater the degree of annexation or physical connection, the more likely an object is to be a fixture. So a picture, which is simply fixed to the property by a picture hook is unlikely to be a fixture, but a bath, which is tiled and cemented in, is.
Test two: removability
How easy is it to remove the object? The easier it is to remove the more likely it is to be a chattel.
As it can sometimes be difficult to distinguish clearly between fixtures and fittings, parties involved in property and land sale transactions are advised to seek independent legal advice. This will help you to avoid misunderstandings and problems regarding Stamp Duty, Land Tax Duty, Corporation Tax and Capital Allowance payments, and claims for relief.
The courts are frequently asked to clarify what are fixtures and fittings, and there are numerous cases defining these terms in context. Here are a few examples:
- Central heating
- Block of stones forming a dry-stone wall
- Free standing Fridge
- Free standing Cooker
- Garden shed
- Block of stones in builders merchant yard
It is important to establish which fixtures belong to the property and which belong to the vendor personally.
Disputes over whether works of arts are fixtures or chattels are common. The answer depends on the degree of annexation of the item to the building (e.g. if a painting is fixed to the wall and if it can be removed).
How does this affect your stamp duty?
As well as being important between buyer and seller so that there are no disputes or misunderstandings, it’s also important for tax reasons, particularly Stamp Duty.
Properties which are under £250,000 are subject to stamp duty at 2%. Once you get over £250k the stamp duty goes up to 5%, So if you are interested in a property that’s valued at £260,000, you would be paying an extra £8,000 in stamp duty compared to a property that was valued at £250,000. This is likely to make you tempted to try to persuade the vendor to accept less. Getting them down by £10,000 in the asking price, would actually save you £18,000 because of the extra stamp duty.
Of course it’s possible that they won’t agree, and actually think that their property is worth £270,000 or more, and that they’ve already reduced the asking price to take the stamp duty problem into account.
In these circumstances, people are sometimes tempted to use chattels to try and get around the problem, because chattels are not subject to stamp duty. So, for example, if the property has carpets and curtains (which are fixtures and fittings) the parties may say that they are actually paying £250,000 for the property (so less stamp duty) but £10,000 for the fixtures and fittings (which are not subject to stamp duty). So the vendor has a contractual right to the whole £260,000 and the purchaser pays £8,000 less in stamp duty.
Sounds like a great idea doesn’t it! But it’s not! It’s tax evasion, and if the Revenue become aware of this, there can be serious consequences. Your solicitor will not be willing to help you with a tax fraud, and may ask you to provide evidence, in the form of a valuation of the items in question, before allowing you to proceed.
A purchaser is responsible for the accurate completion of their land transaction return (which is the form submitted to the Revenue with the stamp duty payment) and HM Revenue & Customs can make enquiries as to the accuracy of any return. Where a deduction has been made for chattels, the Revenue may therefore investigate whether those items fall within the definition of chattels rather than fixtures.
Whilst there is no comprehensive list available, HM Revenue & Customs have confirmed that the following items will normally be regarded as chattels:-
- carpets (fitted or otherwise)
- curtains and blinds
- free standing furniture
- kitchen white goods
- electric and gas fires (provided that they can be removed by disconnection from the power supply without causing damage to the property)
- light shades and fittings (unless recessed)
- plants growing in pots or containers
The following items will not normally be regarded as chattels: –
- fitted kitchen units, cupboards and sinks
- ages and wall mounted ovens
- fitted bathroom sanitary ware
- central heating systems
- intruder alarm systems
- plants, shrubs or trees growing in the soil
Speak to your conveyancer about what you can do if you would like to take things with you when moving out then ensure that the conveyancer is aware of these items and, more importantly, that the other side are aware and everything is agreed. You should also make sure that they know what you are leaving behind, because if you leave something that the purchaser wasn’t expecting, they could claim from you the cost of having it removed.
When buying or selling a house it is useful to have an inventory in order to agree from the outset which fixtures, and fittings will be included in the sale. Your conveyancer can help you complete this.
Disclaimer – our articles are designed to give you guidance and information. There is no substitute for proper direct advice, particularly as everyone’s circumstances are different. If anything in this article may affect you, please contact us for advice that is specific to your circumstances.