Calculate exactly how much Capital Gains Tax (CGT) you owe on a UK residential property sale. Updated for the 2025/26 tax year with the latest HMRC rates, Private Residence Relief rules, and the 60-day reporting deadline. Whether you're selling a buy-to-let, second home, or inherited property, this tool gives you a detailed CGT breakdown.
Capital Gains Tax on property is one of the most significant costs of selling a second home or investment property in the UK. The rules changed substantially in October 2024 when the government raised the higher rate from 28% to 24%, while keeping the basic rate at 18%. Understanding how to maximise your reliefs can save tens of thousands of pounds.
| Taxpayer Type | CGT Rate (Residential) | CGT Rate (Non-Residential) |
|---|---|---|
| Basic Rate (income up to £50,270) | 18% | 10% |
| Higher Rate (income £50,271 to £125,140) | 24% | 20% |
| Additional Rate (income over £125,140) | 24% | 20% |
Note: The rate applied depends on your taxable income plus the taxable gain. If only part of your gain pushes you into the higher rate band, a blended rate applies.
Private Residence Relief (PRR) is the most powerful CGT relief available to property owners. If a property was your only or main home throughout the entire period of ownership, the gain is completely exempt from CGT. The final 9 months of ownership always count as a period of main residence, regardless of whether you were living there (this was reduced from 18 months in 2020).
Where a property was your main home for only part of your ownership, PRR applies proportionally. For example, if you owned a property for 10 years and lived in it for 4 years plus the final 9 months (4.75 years total), 47.5% of the gain is covered by PRR.
Before April 2020, lettings relief could exempt up to £40,000 per owner from CGT when you had let out a property that was also your main home. Since April 2020, lettings relief only applies if you shared occupation of the property with your tenant - meaning you rented out a room while living in the same property. If you let the entire property, lettings relief is no longer available.
You can reduce your CGT gain by deducting legitimate costs from your gross gain. These include:
Note: You cannot deduct mortgage interest, repairs, or ongoing maintenance costs from the capital gain (though you may be able to deduct these from rental income). HMRC makes a strict distinction between improvements and repairs.
Every individual has an annual CGT exempt amount of £3,000 for 2025/26. This was reduced from £12,300 in 2022/23 and £6,000 in 2023/24. Married couples and civil partners each have their own allowance, so jointly owned property can benefit from a combined exemption of £6,000.
| Cost Type | Buying (SDLT) | Selling (CGT) |
|---|---|---|
| Main home | 0-12% SDLT on purchase price | CGT exempt via PRR |
| Second home / BTL | 3% SDLT surcharge applies | 18% or 24% CGT on gain |
| First-time buyer | Reduced SDLT thresholds | Full PRR if main home |
| Non-UK resident | 2% surcharge applies | Non-resident CGT rules |
Transfers of assets between spouses and civil partners living together are exempt from CGT (treated as no-gain, no-loss). This creates a powerful planning opportunity: before selling, you can transfer a share of a property to your spouse so that each of you uses your own £3,000 annual exempt amount. If one spouse is a basic rate taxpayer, the gain attributed to them is taxed at 18% rather than 24%, potentially saving thousands in tax.
If you make a capital loss on a property sale, you can offset this against other capital gains in the same tax year. Unused losses are carried forward indefinitely and can be used against future gains. Losses must be reported on your Self Assessment return even if there is no tax to pay, to preserve the losses for future use.
If you gift a property to another person (other than to a spouse), CGT is normally charged as if you had sold it at market value. However, Gift Holdover Relief allows the CGT to be deferred - the gain is "held over" and the recipient inherits your original base cost. This is useful for passing assets down generations, though inheritance tax considerations also apply. Note that Gift Holdover Relief is generally not available for residential property unless it qualifies as a business asset.
Since 27 October 2021, UK resident individuals disposing of UK residential property must report and pay any CGT due within 60 days of completion. This is done through HMRC's online UK Property Reporting Service, separate from Self Assessment. The 60-day clock starts from the date of completion, not exchange of contracts.
Penalties for late reporting start at £100 for up to 6 months late, rising to £300 or 5% of the tax due (whichever is greater) for 6-12 months late, and £300 or 5% again for over 12 months. Interest is also charged on late payment at the HMRC late payment rate.
For 2025/26, CGT on residential property is 18% for basic rate taxpayers and 24% for higher or additional rate taxpayers. These rates changed from October 2024 when the higher rate was raised from 20% to 24% for non-residential assets. For residential property, the rate was already 28% for higher rate taxpayers until October 2024, when it was cut to 24%.
The annual CGT exempt amount is £3,000 per person for 2025/26. This was dramatically reduced from £12,300 in 2022/23 and £6,000 in 2023/24. Married couples and civil partners can each use their own allowance, potentially using a combined £6,000 exemption on jointly owned property.
PRR exempts any gain made while a property was your main home from CGT. If a property was your main residence for the entire ownership period, the gain is fully exempt. Where it was only your home for part of the time, PRR applies proportionally. The final 9 months of ownership always qualify for PRR, so even if you moved out before selling, the last 9 months are always exempt.
Since October 2021, UK residents must report and pay CGT on residential property within 60 days of completion. This is done through HMRC's online UK Property Reporting Service. If you're already registered for Self Assessment, you still need to file the 60-day return separately. Failure to comply results in automatic penalties starting at £100.
Lettings relief is now restricted to situations where you shared occupation of the property with your tenant. If you let the whole property while living elsewhere, lettings relief no longer applies since April 2020. Previously, it could exempt up to £40,000 per owner; now it only helps in shared-occupation letting scenarios (such as renting a room in your home while you live there).
You can deduct purchase costs (stamp duty, legal fees, survey costs), improvement costs (extensions, conversions, structural changes - not repairs), and sale costs (estate agent fees, legal fees) from your gross gain to calculate your net taxable gain. Only genuine capital improvements count - maintenance, repairs, and redecoration do not reduce your CGT liability.
Yes. Transfers between spouses and civil partners are CGT-free on a no-gain, no-loss basis. This means each spouse can use their own £3,000 annual exempt amount when the property is eventually sold, potentially saving up to £1,440 in tax (£3,000 at 24% for a higher rate taxpayer). If one spouse is a basic rate taxpayer, you can also benefit from the lower 18% CGT rate on their share of the gain.
Capital losses on property can be offset against other capital gains in the same tax year. If you have no other gains, unused losses are carried forward indefinitely. You must report losses on your Self Assessment return within 4 years of the end of the tax year in which they occurred, even if no tax is due, to preserve them for future use.