Start with property equity
Property equity at completion is the purchase price less the mortgage amount. If a £300,000 property uses a £150,000 mortgage, the equity contribution is £150,000.
Add purchase tax
Property purchase tax depends on location, price, ownership circumstances and applicable surcharges. The calculator selects SDLT, LBTT or LTT based on the chosen UK jurisdiction, but special transactions and reliefs may require an official calculator or professional advice.
Add professional and finance costs
- Conveyancing and searches.
- Survey and valuation.
- Mortgage broker or product fees paid rather than added to the loan.
- Registration and specialist legal work where required.
Add the cost of making the property lettable
Include decoration, furniture, appliances, safety work and refurbishment needed before the first tenancy. Do not assume every item will be an immediately deductible rental expense; improvements and repairs can receive different tax treatment.
Keep an operating reserve
Avoid using every available pound at completion. The property may be empty initially, a repair may arise, or the first mortgage payment may fall before rent is received. The appropriate reserve depends on the property, mortgage and your wider finances.
Hypothetical illustration
| £300,000 purchase less £150,000 mortgage | £150,000 |
|---|---|
| Illustrative additional-property SDLT | £20,000 |
| Legal and survey | £2,500 |
| Initial works | £5,000 |
| Other purchase costs | £1,000 |
| Total before operating reserve | £178,500 |
This is a transparent hypothetical example using the calculator’s default assumptions, not a quote or an actual transaction. Confirm purchase tax using the relevant official calculator.
Calculate your initial cash