You pay capital gains tax (CGT) on the profit when you sell a UK property that is not your main home, such as a rental flat or a second home. For 2026/27 the first £3,000 of your total gains is tax-free, and the rest is taxed at 18% or 24% depending on your income. Selling your only or main home is usually free of CGT because of Private Residence Relief, but part of the gain can be taxable if you let it out or were away for long periods.
Note: this is general information, not tax advice. CGT depends on your personal circumstances, and rates and allowances can change. Check GOV.UK or speak to a tax adviser before you sell, and always before you file a return.
Do you have to pay CGT when you sell a property?
Whether CGT applies depends on what the property was to you. The rules differ across these common situations:
| Situation | Usually CGT due? |
|---|---|
| Your only or main home, lived in throughout | No, because of Private Residence Relief |
| A second home or holiday home | Yes, on the whole gain |
| A buy-to-let flat or house | Yes, on the whole gain |
| A former main home that you have let out | Part of the gain may be taxable |
| Inherited property, sold for more than its value at death | Yes, on the gain since death |
| Property given to you, or that you gave away | Gains can arise on the transfer, so check the rules |
The test is about gains, not sales. If you sell for less than you paid plus allowable costs, you have a loss, not a gain, and you do not owe CGT. The loss should still be reported, because it can reduce future gains. For related property taxes, see Stamp duty on additional homes and second properties for what you paid on the way in, and Buy-to-let tax and the Section 24 mortgage interest rule for the income tax side of letting.
How the gain is worked out
CGT is charged on the gain, not on the sale price. The basic sum is:
- Start with the sale price.
- Subtract what you paid for the property.
- Subtract allowable costs of buying and selling and any capital improvements.
- The result is the gain (or loss).
Allowable costs usually include solicitor and estate agent fees, Stamp Duty or its Scottish and Welsh equivalents paid on the purchase, and the cost of improvements that add to the value of the property, such as an extension or a new conservatory. Ordinary repairs and maintenance, such as repainting or fixing a boiler, do not count. Keep receipts and completion statements for years, because HMRC may ask you for them. If you inherited the property, the starting figure is normally its value at the date of death, not what the person originally paid, and if you were given it, the market value at the time of the gift is normally used. Check GOV.UK for how to value a property for CGT.
CGT rates and the £3,000 allowance in 2026/27
Everyone has an annual exempt amount. For 2026/27 it is £3,000, and it applies to your total gains in the year, not per property. After it, residential property gains are taxed at:
- 18% on the part of the gain that fits within your unused basic-rate band (£37,700 in 2026/27), and
- 24% on the part above that.
Higher-rate and additional-rate taxpayers pay 24% on all of the taxable gain. The gain is added on top of your other taxable income to see where it falls, so your salary decides how much is taxed at 18%. These rates are the same in Scotland, although your income tax band there is different. Trustees and personal representatives pay 24%. The rates and the allowance can change, so check GOV.UK before you rely on them for a later sale.
Worked example: selling a buy-to-let flat
Take a flat bought for £180,000 and sold for £260,000, with £8,000 of allowable buying and selling costs. The gain is £260,000 – £180,000 – £8,000 = £72,000. After the £3,000 allowance, the taxable gain is £69,000. The tax depends on other income:
| Other income in the year | Basic-rate band left | Taxed at 18% | Taxed at 24% | CGT due |
|---|---|---|---|---|
| £35,000 | £15,270 | £15,270 | £53,730 | £15,644 |
| £70,000 | £0 | £0 | £69,000 | £16,560 |
The first column is worked from the band: £37,700 minus the £22,430 of taxable income (£35,000 minus the £12,570 Personal Allowance) leaves £15,270 at 18%. That is £2,748.60 at 18% plus £12,895.20 at 24%, a total of £15,643.80, or about 21.7% of the gain. The second taxpayer is already above the basic-rate band, so all £69,000 is at 24%, which is £16,560. Figures are from the House of Calculator CGT engine.
Notice how little the tax differs: £916 on a £72,000 gain. At these levels of gain, most of the tax is at 24% whatever your salary.
Worked example: a home that was partly let
Private Residence Relief covers the years the property was your main home, and the final nine months of ownership always qualify as long as it was your main home at some point. Suppose you bought a house for £200,000, lived in it for six years, let the whole house for the next four years, and sold it for £330,000 with £10,000 of allowable costs. This is a simplified illustration worked by hand, and your own facts may differ:
- Gain before relief: £330,000 – £200,000 – £10,000 = £120,000.
- Ownership: 10 years, or 120 months.
- Exempt months: 72 months lived in, plus the final 9 months (which fall in the letting period) = 81 months.
- Exempt share: 81 ÷ 120 = 67.5%, which is £81,000 of the gain.
- Chargeable gain: £120,000 – £81,000 = £39,000.
After the £3,000 allowance, £36,000 is taxable. If your other income is £30,000, £20,270 of it is within the basic-rate band at 18% (£3,648.60) and £15,730 is at 24% (£3,775.20), so the CGT is £7,423.80 (the calculator confirms this when you enter the £39,000 chargeable gain). Without the relief the tax would have been far higher, which is why the occupation dates matter.
Letting relief is now very limited. It only applies where the owner shared the home with a tenant or lodger, so it does not help if you let the whole property. The full rules are in HMRC’s helpsheet on GOV.UK.
Joint owners and married couples
If you own the property jointly, each owner has their own gain, their own £3,000 allowance and their own basic-rate band. That can reduce the total tax. Take a flat with a gain of £72,000 owned equally by two people each with £35,000 of other income. Each has a gain of £36,000, an allowance of £3,000, and a taxable gain of £33,000:
| Owner | Taxable gain | At 18% | At 24% | CGT |
|---|---|---|---|---|
| Owner A | £33,000 | £15,270 | £17,730 | £7,004 |
| Owner B | £33,000 | £15,270 | £17,730 | £7,004 |
| Total | £66,000 | £14,008 |
That is £1,636 less than the £15,644 a single owner on the same income would pay, because there are two allowances and two bands. The result changes if the owners have very different incomes: with £20,000 of other income, one owner’s CGT on the same £36,000 share would be £6,104, and with £70,000 it would be £7,920.
Transfers between spouses or civil partners who live together are generally made on a no-gain, no-loss basis, so a transfer before a sale can sometimes even out income and use both allowances. The rules, including what counts as a genuine gift, are on GOV.UK, so check them before moving ownership.
Using losses
If you have capital losses from earlier years, or from other assets in the same year, they can reduce your gain. For example, with a property gain of £98,000 and a £10,000 loss brought forward, the taxable gain falls from £95,000 to £85,000 after the allowance. For a buyer on £28,000 of other income, CGT falls from £21,464 to £19,064, a saving of £2,400 (24% of the loss). Losses must be reported to HMRC within the time limit to carry them forward, so do not simply ignore a loss. Check GOV.UK for the deadline and the process.
Reporting and paying: the 60-day rule
For most UK residential property sales, you must report the gain and pay the CGT within 60 days of completion. This is separate from your Self Assessment return. You use HMRC’s online service for reporting a UK property disposal, then pay the tax. You may also need to include the gain on your tax return for the year. If you miss the 60-day deadline, penalties and interest can apply, so build the date into your plan the moment you exchange contracts.
You can sometimes avoid this step. If there is no CGT to pay, for example because the property is your main home or because you have a loss, you may not need a 60-day return, although reporting a loss is advisable. Check the GOV.UK page on reporting and paying CGT on UK property for the current process.
Ways to reduce the tax
- Use your annual exempt amount. If you co-own, both allowances can be used.
- Keep records of improvements. Extensions and structural work add to your cost base. Repairs do not.
- Claim all selling costs. Agent fees and legal fees reduce the gain.
- Time the sale. A sale just before or after 5 April moves the gain into a different tax year and a different allowance.
- Consider who owns it. A spouse with a lower income may pay less tax at 18%.
- Check Private Residence Relief. If the property was ever your main home, part of the gain may be exempt.
None of these is a substitute for advice on your own situation. Avoid arrangements that only exist to create a tax saving, and make sure you can explain the reason for any transfer.
Common mistakes
- Taxing the sale price rather than the gain. CGT is on the profit.
- Forgetting the buying costs. Stamp Duty and legal fees paid at purchase are allowable.
- Counting repairs as improvements. They are not allowable.
- Missing the 60-day deadline. It runs from completion, not exchange.
- Assuming a main home is always exempt. Letting and long absences can bring part of the gain into tax.
- Using last year’s allowance or rates. They can change between tax years.
Try the calculator
Enter your sale price, purchase price, costs and other income into the Capital Gains Tax Calculator (UK) to see the gain and an estimate of the tax. It does not model Private Residence Relief, so deduct the exempt share from the gain yourself first.
Frequently asked questions
How much CGT do I pay on a property sale?
It depends on the gain and your income. After the £3,000 annual exempt amount in 2026/27, the gain is taxed at 18% up to the top of your basic-rate band and 24% above it. Higher-rate taxpayers pay 24% on all of it.
Do I pay CGT when I sell my main home?
Usually not, because of Private Residence Relief. The final nine months of ownership are always covered if it was your main home at some point, but letting it out or long periods away can make part of the gain taxable.
When do I have to pay CGT on a property?
For most UK residential property sales you must report and pay within 60 days of completion. Check GOV.UK for the current process, because missing the deadline can lead to penalties and interest.
Can I use my partner's CGT allowance?
Each owner has their own £3,000 allowance, so jointly owned property can use two. Transfers between spouses or civil partners who live together are generally no-gain, no-loss, but check the rules on GOV.UK before transferring ownership.
What costs can I deduct from the gain?
Typically legal and estate agent fees on buying and selling, Stamp Duty paid when you bought, and the cost of improvements that add value. Routine repairs and maintenance are not deductible.