Capital Gains Tax on UK Property — What You Need to Know
Capital gains tax (CGT) is charged on the profit you make when you sell a UK residential property that is not your main home. From October 2024, the CGT rates on residential property are 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers. These replaced the previous 18%/28% rates and apply to completions from that date onwards.
Who pays CGT on property?
CGT applies to any UK residential property that is not your Principal Private Residence (PPR) — including buy-to-let properties, second homes, holiday lets, inherited properties and any property you have stopped living in as your main home. You pay CGT on the gain: the difference between what you originally paid and what you sold for, after subtracting all allowable costs.
What costs can you deduct?
HMRC allows you to deduct the following from your gain: the original purchase price; stamp duty land tax (SDLT) paid on purchase; solicitor, surveyor and valuation fees on both purchase and sale; estate agent fees on sale; and the cost of capital improvements such as extensions, loft conversions or structural refurbishments. You cannot deduct mortgage interest, routine maintenance, decorating or letting management fees — these are revenue costs, not capital costs.
The £3,000 annual exempt amount
Every individual has a CGT annual exempt amount of £3,000 for 2025/26 (reduced from £12,300 in 2022/23). This is deducted from your total capital gains before calculating tax owed. Couples who own property jointly can each use their own exempt amount, giving £6,000 of tax-free gains per year if the property is jointly held.
The 60-day reporting rule
If you sell a UK residential property and make a taxable gain, you must report and pay CGT within 60 days of completion using HMRC's Capital Gains Tax UK Property service. Missing this deadline triggers automatic penalties and interest charges. The gain must also be included on your self-assessment return for the relevant tax year.
Principal Private Residence (PPR) relief
Your main home is fully exempt from CGT under PPR relief, provided you lived there as your principal residence throughout your ownership. If you let the property at any point, partial PPR relief applies proportionally — the exempt fraction equals the years of your own occupation divided by total ownership. Tick the PPR box in the calculator above to confirm zero CGT on a main residence sale.
Related calculators: If you're modelling a buy-refurb-sell, use our Property Flip Calculator. Planning the disposal of multiple properties? Try our Portfolio Disposal Calculator. For ongoing cashflow analysis, see our Cashflow Calculator.
External references: HMRC: Capital Gains Tax | Report and pay CGT within 60 days
Capital Gains Tax FAQs
How much CGT do I pay on a UK property sale?
From October 2024, CGT rates on UK residential property are 18% (basic-rate taxpayers) and 24% (higher/additional-rate taxpayers). You first deduct the purchase price, buying costs, improvements and selling costs to get your gross gain, then subtract the £3,000 annual exempt amount. Tax is calculated on the remaining taxable gain.
Do I pay CGT on my main home?
No — your main residence is exempt from CGT under Principal Private Residence (PPR) relief throughout the period you lived there. If you rented the property out while owning it, a portion of the gain may be taxable in proportion to the time it was let rather than occupied by you.
What costs can I deduct from my capital gain?
Allowable deductions include: purchase price, SDLT paid, legal and survey fees (purchase and sale), estate agent fees, and capital improvements. You cannot deduct mortgage interest, maintenance, repairs or management fees — these are revenue costs with no CGT benefit.
When must I report and pay CGT on a property sale?
You must report and pay within 60 days of completion via HMRC's UK Property CGT service. Late filing triggers a £100 initial penalty, interest on unpaid tax, and further penalties if more than 6 months late. You must also include the gain on your self-assessment tax return for that year.
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