Important Change 2024: From 6 April 2024, the higher rate for residential property increased from 28% to 24%. The annual CGT allowance reduced from £6,000 to £3,000.
How to Calculate Capital Gains Tax on Property
Follow these steps to work out your CGT liability:
1
Calculate Your Gain
Sale price minus purchase price = Gross Gain
2
Deduct Allowable Costs
Subtract buying costs, selling costs, and improvement costs
3
Apply Any Reliefs
Private Residence Relief, Letting Relief, or Principal Private Residence Relief if applicable
4
Deduct Annual Allowance
Subtract £3,000 (£6,000 for joint owners) from the gain
5
Apply CGT Rate
18% for basic rate taxpayers, 24% for higher rate taxpayers
What Costs Can You Deduct?
Allowable costs reduce your taxable gain. Keep all receipts and documentation.
Buying Costs (Allowable)
Stamp Duty Land Tax (SDLT) paid when purchasing
Solicitor and conveyancing fees
Survey and valuation fees
Estate agent fees (if you paid any when buying)
Improvement Costs (Allowable)
Extensions and conservatories
Loft conversions
New kitchen or bathroom installations (not replacements)
Central heating installation
Double glazing installation
Non-Allowable Costs
General repairs and maintenance
Decorating and painting
Like-for-like replacements
Insurance and utility bills
Mortgage interest (already claimed against rental income)
Selling Costs (Allowable)
Estate agent fees and commission
Solicitor and conveyancing fees
Marketing and advertising costs
EPC certificate costs
CGT Property Examples
Buy-to-Let Sale (Basic Rate)
Sale Price£300,000
Purchase Price-£200,000
Buying Costs-£6,000
Improvements-£15,000
Selling Costs-£4,500
Gain£74,500
Less Allowance-£3,000
Taxable£71,500
CGT @ 18% = £12,870
Second Home (Higher Rate)
Sale Price£450,000
Purchase Price-£320,000
Buying Costs-£12,000
Improvements-£25,000
Selling Costs-£7,000
Gain£86,000
Less Allowance-£3,000
Taxable£83,000
CGT @ 24% = £19,920
When You Don't Pay CGT on Property
Private Residence Relief (PRR)
You don't pay CGT when selling your main home if:
It has been your only or main residence throughout ownership
You haven't used it for business
The grounds are less than 5,000 square metres (about 1.2 acres)
You haven't let out any part of it (other than lodger relief)
Automatic Relief: The final 9 months of ownership always qualify for PRR, even if you've moved out. This was previously 18 months.
Letting Relief
If you let out part of your home that qualifies for PRR, you may get additional letting relief. This is the lower of:
The amount of PRR you received
£40,000
The gain attributable to the let period
Reporting and Paying CGT
60-Day Rule: You must report and pay CGT on UK residential property within 60 days of completion. Use HMRC's online 'Report and pay Capital Gains Tax on UK property' service.
What You'll Need to Report
Completion date
Sale price and purchase price
All allowable costs with evidence
Your share if jointly owned
Any reliefs being claimed
Payment Deadlines
Property Type
Reporting Deadline
Payment Deadline
UK Residential Property
60 days from completion
60 days from completion
Non-UK Residential Property
60 days from completion
60 days from completion
Commercial Property
Self Assessment deadline
31 January following tax year
Ways to Reduce Capital Gains Tax
Legal Tax Planning Strategies
Use both allowances: Transfer half to spouse before selling to use two £3,000 allowances
Time your sale: Sell in a tax year where you're a basic rate taxpayer for 18% vs 24%
Claim all costs: Keep records of all allowable improvements and fees
Use losses: Offset capital losses from other assets against property gains
Consider PRR: Live in the property as main residence before selling
Holdover relief: Gift to family to defer CGT (they inherit your base cost)
Professional Advice: For complex situations or large gains, consider consulting a tax advisor. The cost is often offset by tax savings they can identify.
Frequently Asked Questions
Do I pay CGT on an inherited property?
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You don't pay CGT when you inherit a property, but you may pay CGT when you sell it. The purchase price for CGT purposes is the probate value (market value at date of death). Any gain above this when you sell is subject to CGT.
Can I offset property losses against gains?
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Yes. If you sell a property at a loss, you can offset this against gains from other property sales in the same tax year, or carry the loss forward to future years. Losses must be reported to HMRC within 4 years.
What if the property was my home but I rented it out?
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You'll receive Private Residence Relief for the period it was your main home, plus automatic relief for the final 9 months. The let period is subject to CGT, but you may qualify for up to £40,000 Letting Relief if you lived there at the same time as letting.
How do I know my CGT rate - basic or higher?
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Add your total taxable income to your property gain. If the combined total exceeds £50,270 (the higher rate threshold), the portion of gain above this is taxed at 24%. Gains within the basic rate band are taxed at 18%.
What happens if I miss the 60-day deadline?
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Late reporting may result in penalties starting at £100 for up to 3 months late, increasing for longer delays. Interest is also charged on late payment. Report as soon as possible to minimise penalties.
For complex calculations, break them into smaller steps
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Understanding Your Results
Our Capital Gains Tax Property Guide provides:
Instant calculations - Results appear immediately
Accurate formulas - Based on official UK standards
Clear explanations - Understand how results are derived
2025/26 updated - Using current rates and regulations
Common Questions
Is this calculator free?
Yes, all our calculators are 100% free to use with no registration required.
Are the results accurate?
Our calculators use verified formulas and are regularly updated for accuracy.
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People Also Ask
You must file a Self Assessment tax return if you're self-employed earning over £1,000, have income over £100,000, earn untaxed income like rental or investment income, or are a company director. Deadline is 31 January for online filing.
Most employees are on 1257L for 2024/25, reflecting the £12,570 personal allowance. If you have multiple jobs, secondary employment uses BR (basic rate) code. Check your code on payslips or via HMRC online.
Maximise pension contributions (reduces taxable income), use your ISA allowance (tax-free savings), claim work-from-home relief if eligible, make gift aid donations, and ensure you're using all available allowances.