Very basic mortgage/house selling question

Hello there! Simple question from someone who has never sold a house!

- There is £150K to pay on the mortgage (over 17 years)
- Recent valuation of house suggests value of approx £300K 
- Let’s say the house sells for £300k. The £150K and the early repayment charge get taken out of the £300K - let’s just say £140K is left to keep the numbers easy.

Is there a massive tax on that £140K? Are there laws around what you have to do next? I realise I sound like a fool :D but it feels unlikely/too good to be true that it’d just be cash in the bank? 

Comments

  • Newbie_John
    Newbie_John Posts: 380
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    edited 30 October 2023 at 4:12PM
    Here is a calculator:
    https://www.gov.uk/tax-sell-property/work-out-your-gain

    But let's say you bought it for £200k so in this example you will pay about £20k taxes.

    Edit:
    This is the case when it isn't your home, but let's say another property.
  • ACG
    ACG Posts: 23,625
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    Is the property your home or a rental property? 
    If it is (and always has been) your home, there is no tax payable on sale. 
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • amnblog
    amnblog Posts: 12,390
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    but it feels unlikely/too good to be true that it’d just be cash in the bank? 

    If you are selling your home, it would just be 'cash in the Bank' no tax (but, of course no home).
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Yes - it is and always has been my home since I bought it.

    So I guess that’s a pretty good and clear outcome. Thanks for responses everyone! 
  • Strummer22
    Strummer22 Posts: 593
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    edited 30 October 2023 at 3:45PM
    Be aware that you get 6 months FSCS protection on the proceeds of your sale (up to £1 million). After 6 months it reverts to standard £85,000 protection. If you're not planning on buying another house with the proceeds, you'd need to split it across a couple of (or more?) accounts with different banks to have 100% FSCS protection.
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