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Why we have to sell and buy on the same day?

Edinburgh First Time Buyers

This is a perfectly valid question.

I agree that it would make more sense and take some of the stress out of moving if you could buy your new home a couple of days before selling your current home, but unfortunately there are some very good reasons why this is not usually possible.

The first reason is that in almost every case, you will need the money from the sale of your home to go towards the price of your new home. As you can see, since you will not have that money until after you have sold you will not have sufficient money to pay the full price those few days earlier.

In the past it was sometimes possible to have your bank arrange a Bridging Loan for you to lend you those funds for the few days required. But Bridging Loans are hardly ever available nowadays and even where possible they can be very expensive.

So, that is the main reason why people generally have to move out and move in on the same day.

There is now an additional reason.

That is because in 2016 the Scottish Government introduced Additional Dwelling Tax or ADS. Although this was explained at the time as being a Tax to dissuade people from buying investment properties, it in fact goes much further than that. And so, and even although it sounds like madness, since at the time of buying your new home you would still own your current home, you would need to pay the Tax. That tax is 4% of the purchase price of your new home.

That said, as long as you complete the sale of your current home a few days later, you are entitled to reclaim that tax back.  But not everyone would have that extra money available to take this step.

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