You do not usually pay Capital Gains Tax when you sell the home you live in, because of Private Residence Relief, but you may have to pay it when you sell a second home, a buy-to-let or an inherited property that has gone up in value. For UK residential property, any tax due must be reported and paid within 60 days of completion.
This page explains how the rules generally work for the 2026 to 2027 tax year, using HMRC’s guidance on GOV.UK. It is not tax advice. Tax depends on your whole situation, so always check GOV.UK or speak to HMRC or a qualified tax adviser before you rely on any figure.
When is selling your home free of Capital Gains Tax?
GOV.UK says you get Private Residence Relief automatically, and pay no Capital Gains Tax, if all of these apply:
- you have one home and have lived in it as your main home for all the time you have owned it
- you have not let part of it out (a lodger does not count)
- you have not used part of it exclusively for business (a temporary home office does not count)
- the grounds, including all buildings, are less than 5,000 square metres in total, just over an acre
- you did not buy it just to make a gain
If any of these do not apply, you may still get relief for part of the gain, but you might have some tax to pay. Married couples and civil partners can only count one property as their main home at any one time.
What if you moved out, let it or worked away?
Relief can still apply for some periods when you did not live there.
- The last 9 months. GOV.UK says you always get relief for the last 9 months before you sold, provided the home was your only or main residence at some point.
- Periods away. If you have one home or nominated it as your main home, relief can cover absences adding up to 3 years for any reason, up to 4 years if you had to live elsewhere in the UK for work, or any period working outside the UK. You must usually have lived in the home before and afterwards.
- Disability or care. If you own only one home, the final period of relief is 36 months if you are disabled or in long-term residential care.
GOV.UK gives an example. If you owned a home for 20 years and were away for 5 years that do not qualify, the gain that gets relief is reduced by 25%.
If you let out part of your home while living there with your tenant, Letting Relief may also apply. It is the lowest of the Private Residence Relief you get, £40,000, or the gain on the let part. It does not cover periods when the home was empty.
Do you pay Capital Gains Tax on a second home or buy-to-let?
You may do. GOV.UK lists buy-to-let properties, business premises, land and inherited property among the things you may pay Capital Gains Tax on if you make a gain.
Your gain is usually the difference between what you paid and what you sold it for. You can deduct the costs of buying, selling and improving the property, such as estate agents’ and solicitors’ fees and an extension, but not normal maintenance like decorating. If you own it jointly, you work out the gain on your share.
You then take off your tax-free allowance and apply the rate. MoneyHelper makes the same point from the seller’s side: you might need to pay Capital Gains Tax when selling a second home, including an inherited one. Our page for landlords selling up covers selling a tenanted or empty rental.
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What are the rates and allowances for 2026 to 2027?
These figures come from GOV.UK. They can change, so check before you rely on them.
| 2026 to 2027 | |
|---|---|
| Tax-free allowance (annual exempt amount), individuals | £3,000 |
| Tax-free allowance, trusts | £1,500 |
| Rate on gains within your basic rate band | 18% |
| Rate on gains above your basic rate band | 24% |
| Rate for trustees and personal representatives | 24% |
| Basic rate band used in GOV.UK’s worked examples | £37,700 |
| Deadline to report and pay on UK residential property | 60 days after completion |
Residential property used to have its own, higher rates. For gains from 6 April 2026, HMRC’s rates and allowances guidance lists a single pair of rates for individuals, 18% and 24%, with no separate rate for residential property.
To find your rate, GOV.UK explains, you add your taxable gains (after the allowance) to your taxable income. The part that falls within the basic rate band is taxed at 18%, and anything above it at 24%.
A simple illustration
The figures below are illustrative only. Suppose you sell a buy-to-let for £80,000 more than you paid, and your allowable buying, selling and improvement costs come to £20,000. Your gain is £60,000. Taking off the £3,000 allowance leaves £57,000. If all of that falls above your basic rate band, 24% of £57,000 is £13,680. If some falls within the band, that part is taxed at 18% and the bill is lower.
GOV.UK has a calculator for Capital Gains Tax on property, although it cannot be used in every situation, for example by personal representatives or if you claim reliefs other than Private Residence Relief or Letting Relief.
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What about inherited property?
When you sell a property you have inherited, your gain is generally measured from its value when the person died, rather than what they originally paid. GOV.UK explains that if you do not know the Inheritance Tax value, you use the market value at the date of death.
If executors sell the property while dealing with the estate, GOV.UK says the sale needs to be included when reporting the estate to HMRC, and personal representatives pay Capital Gains Tax at 24% on gains from 6 April 2026. HMRC’s guidance adds that personal representatives can claim the annual exempt amount for the tax year of the death and the following 2 tax years. Our guide to selling an inherited house covers the practical side, and our page on empty properties looks at the costs of holding one while you decide.
How quickly do you have to report and pay?
GOV.UK is clear: you must report and pay any Capital Gains Tax due on UK residential property within 60 days of completing the sale. The clock runs from completion, not exchange. You may have to pay interest and a penalty if you do not report and pay on time.
- If you are UK resident and your total gains are below the tax-free allowance, you do not need to report the gain online.
- If you are registered for Self Assessment, you also include the sale on your tax return.
- If you are not UK resident, you must report every sale of UK property or land by the deadline, even if there is no tax to pay. Our page on moving abroad covers selling from overseas.
Does a quick sale change the tax?
Selling for less than the open market price means a smaller gain, so any tax on a taxable property is likely to be lower. But GOV.UK also says that market value is used instead of the actual price in some situations, including where an asset was sold for less than it was worth to help the buyer. If you are selling below value, it is worth checking with HMRC or a tax adviser how your gain should be worked out.
A quick sale can also bring completion forward, which brings the 60-day deadline forward with it. Make sure you know your likely bill before you complete.
If you are selling a property that is not your home and want to understand your options, you can get offers for my home from vetted cash buyers on our panel. It is free and there is no obligation to accept. We cannot give tax advice, so for that, please use HMRC’s guidance on GOV.UK or a qualified adviser.
Common questions
Do I pay Capital Gains Tax when I sell my main home?
Usually not. GOV.UK explains that you get Private Residence Relief automatically if you have one home that you have lived in as your main home for the whole time you owned it, and you have not let it out, used part of it only for business, had grounds over 5,000 square metres, or bought it just to make a gain. If any of those do not apply, check GOV.UK or take professional advice.
What is the Capital Gains Tax allowance for 2026 to 2027?
GOV.UK gives the tax-free allowance, or annual exempt amount, as £3,000 for individuals and £1,500 for trusts for the 2026 to 2027 tax year. It applies to your total gains for the year, not to each sale.
When do I have to pay Capital Gains Tax on a property sale?
For UK residential property, you must report and pay any Capital Gains Tax due within 60 days of completing the sale. You may have to pay interest and a penalty if you are late. UK residents do not need to report if their total gains are below the tax-free allowance, but non-residents must report every sale of UK property or land.
Can I deduct the costs of selling?
Yes. GOV.UK says you can deduct the costs of buying, selling or improving the property, such as estate agents' and solicitors' fees and improvement works like an extension. Normal maintenance, such as decorating, does not count.
Related guides
- Selling a buy-to-let property, with or without tenants Renters' Rights Act, the selling ground, and selling with tenants.
- Selling an inherited or probate property quickly Grants of probate, confirmation, council tax, tax and executor duties.
- Selling your house before moving abroad Selling from abroad, powers of attorney and non-resident CGT.
- Selling an empty house quickly Council tax premiums, insurance, security and deterioration.