Buying a property in the UK can feel daunting, especially with costs like Stamp Duty Land Tax (SDLT) adding up. Many potential movers worry about not having enough cash on hand for stamp duty, solicitors' fees, and other expenses. But here's the good news: if you're selling your current home, you can often use the equity from that sale to cover these costs. This means a lack of liquid savings doesn't have to stop you from relocating.

In this article, we'll explore how stamp duty works in the UK, the role of equity in property transactions, and practical tips for making your move happen. Whether you're upsizing, downsizing, or simply changing location, understanding these options can make the process smoother.

What is Stamp Duty Land Tax (SDLT) in the UK?

Stamp Duty Land Tax is a tax you pay when buying a property or land in England or Northern Ireland. (Scotland has Land and Buildings Transaction Tax, and Wales has Land Transaction Tax – but we'll focus on SDLT here for the main UK market.)

SDLT applies to most residential purchases over a certain threshold. As of 2025, the rates are tiered based on the property price:

  • £0 to £250,000: 0% (for first-time buyers, this threshold is higher at £425,000).
  • £250,001 to £925,000: 5%.
  • £925,001 to £1.5 million: 10%.
  • Over £1.5 million: 12%.

For example, on a £400,000 home, you'd pay nothing on the first £250,000 and 5% on the remaining £150,000 – that's £7,500 in stamp duty.

If you're buying an additional property (like a second home or buy-to-let), you'll face a 3% surcharge on top of these rates. Always check the latest rates on the HMRC website, as they can change with government budgets.

The Hidden Costs of Buying a Property: Beyond Stamp Duty

Stamp duty isn't the only expense. When purchasing a home, you'll also need to budget for:

  • Solicitors' fees: Typically £1,000 to £2,500, covering conveyancing, searches, and legal advice.
  • Survey costs: £400 to £1,500, depending on the type (e.g., basic valuation or full structural survey).
  • Mortgage fees: Arrangement fees, valuation, and possibly broker costs.
  • Moving expenses: Removals, insurance, and any temporary storage.

These can easily total £5,000 to £10,000 or more. If you don't have this money sitting in your bank account, it might seem impossible to proceed. But that's where selling your current property comes in.

Selling Your Home: Unlocking Equity to Fund Your Purchase

Equity is the difference between your home's market value and any outstanding mortgage. For instance, if your house is worth £300,000 and you owe £200,000 on the mortgage, you have £100,000 in equity.

When you sell, this equity becomes cash (after deductions like estate agent fees and any early repayment charges). In a typical UK property chain – where your sale and purchase happen on the same day – the proceeds from your sale can directly fund your new buy, including stamp duty and fees.

Here's how it works in practice:

  1. Agree on sale and purchase: You find a buyer for your home and a property to buy.
  2. Exchange contracts: This legally commits everyone, usually 4-8 weeks before completion.
  3. Completion day: Your buyer pays you (via solicitors), you pay off your old mortgage, and the surplus goes towards your new property's deposit, stamp duty, and fees.
Your solicitor handles the money flow, ensuring stamp duty is paid to HMRC within 14 days of completion. You don't need upfront cash if the equity covers it – the funds are transferred seamlessly.

Real-Life Example: Moving Without Liquid Cash

Imagine you're selling a £350,000 home with a £150,000 mortgage remaining. After fees, you net £180,000 in equity.

You're buying a £450,000 property. Your new mortgage is £300,000, so you need a £150,000 deposit. Stamp duty might be around £12,500, plus £2,000 in solicitors' fees.

Total needed: £164,500. Your £180,000 equity covers this, leaving you with a surplus.

No need for extra savings – the sale funds everything. This is common for homeowners moving up the ladder.

Potential Challenges and How to Overcome Them

While using equity is straightforward, issues can arise:

  • Timing mismatches: If your sale falls through, you might need a bridging loan (short-term finance) to cover the gap. These are expensive, so build contingencies into your plan.
  • Property chains: Delays from others in the chain can stress finances. Consider chain-free options like new-builds or buying from investors.
  • First-time sellers: If you're a first-time buyer with no sale, you'll need savings or help (e.g., from family or schemes like Help to Buy).

Always consult a mortgage advisor or solicitor early. They can model scenarios and ensure you're eligible for reliefs, like the first-time buyer threshold.

Tax Considerations: Don't Forget Capital Gains

If the property you're selling isn't your main home (e.g., a second property), you might owe Capital Gains Tax on profits. This could reduce your equity. Use HMRC's calculator to check.

For your primary residence, Private Residence Relief usually means no CGT.

Final Thoughts: Don't Let Costs Hold You Back

Moving home in the UK doesn't require a pile of cash if you're selling a property with equity. By using proceeds from your sale, you can cover stamp duty, solicitors' fees, and more – making relocation accessible even without liquid savings.

If you're planning a move, start by getting a free valuation of your current home and speaking to a financial advisor. With the right preparation, your dream property could be closer than you think.

This article is for informational purposes only and not financial advice. Always seek professional guidance for your situation.

For more on UK property buying, check our guides on mortgage options or first-time buyer tips.