Capital Gains Tax on Property: The Complete UK Guide
18%/24% residential rates, the £3,000 annual exempt amount, the 60-day reporting deadline, Private Residence Relief, Lettings Relief and what you can deduct — sourced from gov.uk.
The short answer
Sell a residential property for more than it cost you and the gain above the £3,000 annual exempt amount is taxed at 18% where it fits your unused basic-rate band, and 24% above it. gov.uk is explicit about the deadline that trips up most sellers: “You must report and pay any Capital Gains Tax on most sales of UK property within 60 days.”
The residential rates: 18% and 24%
gov.uk's rates page: “If this amount is within the basic Income Tax band, you'll pay 18% on your gains… For any amount above the basic Income Tax band, you'll pay 24%.” Higher and additional-rate taxpayers pay 24% on the whole gain. Which band applies depends on your total taxable income in the year of sale, not just the gain itself — a seller with a modest salary can get a meaningful slice of even a large gain taxed at the lower 18% rate.
The £3,000 annual exempt amount
gov.uk: “The Capital Gains tax-free allowance is: £3,000.” Every individual gets their own — jointly owned property splits the gain between owners, and each owner applies their own £3,000 allowance against their share before either rate applies. There's no carry-forward: an unused allowance in one tax year is simply gone.
The 60-day reporting deadline
This is the rule most sellers learn about too late. UK residential property Capital Gains Tax is reported and paid within 60 days of completion through HMRC's property-disposal service — not at the normal Self Assessment deadline the following January. Penalties and interest apply from day 61 regardless of whether your year-end return is otherwise perfect. Check the exact date with our 60-day deadline calculator.
Private Residence Relief
If the property was ever your only or main home, Private Residence Relief exempts the gain for the years you lived there, plus HMRC's helpsheet HS283 is explicit about an automatic top-up: “The final 9 months of your period of ownership always qualify for relief, regardless of how you use the property in that time, as long as the dwelling house has been your only or main residence at some point.” That final-period rule covers the common case of moving out before a sale completes. Our PRR calculator applies this to your own dates.
Lettings Relief — narrower than most landlords expect
HS283 sets Lettings Relief at the lowest of three figures: your Private Residence Relief already calculated, £40,000, or the chargeable gain arising from the letting. Crucially, it only applies where “part of the dwelling house has at some time in your period of ownership been let as residential accommodation” while you lived there — a lodger in a home you occupied, not an ordinary buy-to-let you never lived in. An investment property let out from day one gets no Lettings Relief at all.
What you can deduct
The gain is sale price minus purchase price minus allowable costs, not just the raw difference:
- Buying costs — SDLT/LBTT/LTT, legal fees, survey fees from the original purchase.
- Selling costs — estate agent and legal fees on the sale.
- Capital improvements — an extension, a loft conversion, a genuine structural upgrade. Ordinary repairs and maintenance don't count here — they were (or should have been) deducted against rental income in the year you paid them, and can't be claimed twice.
Worked example
A higher-rate landlord sells a buy-to-let for £350,000, bought for £220,000, with £6,000 in buying and selling costs and a £15,000 extension:
| Step | Figure |
|---|---|
| Sale price | £350,000 |
| Less purchase price, costs and improvements | £241,000 |
| Gain before allowance | £109,000 |
| Less annual exempt amount | − £3,000 |
| Taxable gain | £106,000 |
| Capital Gains Tax at 24% | £25,440 |
Run your own numbers, including the basic/higher-rate split, on the Capital Gains Tax calculator.
This is a guide, not financial, tax or legal advice. Figures are estimates from the published rates and thresholds, which change with each Budget. Your own position depends on facts a guide can't see — check anything that matters against gov.uk guidance or a qualified adviser before you act on it.
gov.uk: Capital Gains Tax rates · gov.uk: Capital Gains Tax allowances · gov.uk: tax when you sell property (60-day rule) · HMRC HS283: Private Residence Relief (final 9 months, £40,000 Lettings Relief cap), all read verbatim 11 Sep 2026. Figures match site/taxdata.py's CGT dataset — no conflicts found.
Quick answers
18% on the part of your gain that fits your unused basic-rate Income Tax band, 24% on the rest, after the £3,000 annual exempt amount. Higher and additional-rate taxpayers pay 24% on the whole gain.
Within 60 days of completion, through HMRC's UK property reporting service — not at the normal January Self Assessment deadline. This applies to UK residential property gains specifically.
Usually not, if it's been your only or main residence throughout — Private Residence Relief exempts the gain, and HMRC's rules give an automatic final-9-month exemption even for time after you moved out, as long as it was genuinely your home at some point.
Lettings Relief reduces CGT by up to £40,000, but only where you let out part of a home you lived in yourself — a lodger, for example. An ordinary investment property you never lived in gets no Lettings Relief at all.
The original purchase price, buying costs (stamp duty, legal, survey), selling costs (agent and legal fees), and genuine capital improvements such as an extension. Ordinary repairs and maintenance are an income-tax deduction in the year paid, not a CGT deduction.
Sources
The primary documents this page is built from. Links checked 5 September 2026.
- Tax when you sell property — GOV.UK
- Capital Gains Tax: rates — GOV.UK
- Capital Gains Tax: allowances — GOV.UK
- Report and pay your Capital Gains Tax (UK property: 60 days) — GOV.UK / HMRC
- HS283 Private Residence Relief (Self Assessment helpsheet) — GOV.UK / HMRC