Capital Gains Tax on Property UK 2026/27
Sell a UK property that isn't your main home - a second home, a buy-to-let, an inherited house - and you'll pay Capital Gains Tax on the profit at 18% inside your basic-rate band and 24% above it.2 The old 28% property rate is gone. Your only or main home stays exempt under Private Residence Relief.3 Here's how the sum works, what you can knock off the gain, and the 60-day clock that catches people out.
- Residential property CGT is 18% within your basic-rate band and 24% above it - the same rates as shares since October 2024.2
- The first £3,000 of gains each year is tax-free; deduct buying costs, selling costs and capital improvements before you get there.5
- Your main home is normally exempt under Private Residence Relief, and the final 9 months of ownership always count as a main-home period.3
- If CGT is due, you must report and pay within 60 days of completion through HMRC's UK Property service - late filing brings an automatic £100 penalty.4
- Transferring a share to a spouse before sale is a no-gain/no-loss transfer, unlocking a second £3,000 allowance and their rate bands.1
Which properties are subject to CGT?
CGT applies when you dispose of a UK property that is not your only or main home. This includes:
- Second homes and holiday properties, where you have never nominated the property as your main residence
- Buy-to-let properties, rental investment properties
- Inherited property, CGT is measured from the probate value, not the deceased's original purchase price
- Former main homes, where the property was your main home for only part of your ownership period
- Property sold by non-UK residents, all UK residential property disposals must be reported
Your main home is normally exempt via Private Residence Relief. The full gain is sheltered if you lived there throughout. And the final 9 months always count as a main-home period even after you move out.
CGT rates on residential property 2026/27
These rates have applied since the Autumn Budget of 30 October 2024. The previous higher rate was 28%. It was cut to 24% from that date. All qualifying residential property gains in 2026/27 use the 18%/24% structure.2
How to calculate the gain, allowable costs
The CGT gain = sale proceeds − allowable costs. Allowable costs include:
- Purchase price (or probate value for inherited property)
- Buying costs: solicitor fees, stamp duty, surveyor fees
- Capital improvements: extensions, loft conversions, new bathrooms (not repairs or redecoration)
- Selling costs: estate agent fees, solicitor fees on sale
Example: bought for £200,000, £5,000 buying costs, £15,000 extension, sold for £310,000 with £7,000 selling costs.
Worked example: higher-rate taxpayer
Take the £83,000 gross gain from the cost build-up above. The owner earns £65,000, so their income already fills the basic-rate band and the whole taxable gain lands at 24%.
| Gross gain (after allowable costs) | £83,000 |
| Less annual exempt amount | −£3,000 |
| Income over £50,270, so £0 basic-rate band is left for the gain | £0 at 18% |
| Taxable gain (all at 24%) | £80,000 |
| CGT due (£80,000 × 24%) | £19,200 |
Because it's residential property, this £19,200 must be reported and paid within 60 days of completion.4
Worked example: basic-rate taxpayer with band split
Same £80,000 taxable gain, but this owner's salary is £35,000 - a taxable income of £22,430 after the £12,570 personal allowance. That leaves £15,270 of the £37,700 basic-rate band open, so a slice of the gain gets 18% before the rest hits 24%.
| Taxable gain | £80,000 |
| Basic-rate band left after income (£37,700 − £22,430) | £15,270 |
| First £15,270 at 18% | £2,749 |
| Remaining £64,730 at 24% | £15,535 |
| Total CGT due | £18,284 |
The 60-day reporting rule
Sell a UK residential property with CGT owed and you must report and pay within 60 days of completion. Use HMRC's online UK property reporting service, which is separate from Self Assessment.4 The 60-day clock starts on completion, not exchange of contracts.
Miss the deadline and you get an automatic £100 penalty, rising to £300 after 6 months and another £300 after 12 months, plus interest on unpaid tax. If there is no CGT to pay (gain within the AEA, or fully covered by losses), no report is required.
When you file your Self Assessment return, reconcile the 60-day payment against your final CGT figure for the year. You may get a refund if you overpaid on account.
Selling a second home or buy-to-let? Use the CGT Survival Pack - £4.99 to organise your sale price, purchase cost, improvement costs, agent/legal fees and 60-day reporting notes.
Get the pack →Private Residence Relief, partial and full
PRR applies where a property was your main home for part or all of the ownership period. The exempt fraction is the time it was your main residence (plus the final 9 months) divided by total ownership months.
Example: owned for 120 months, lived in it for 72 months, then let it out. PRR period = 72 months occupation + 9 months final period = 81 months. Exempt fraction = 81/120 = 67.5% of the gain. The remaining 32.5% is chargeable.
Let Property Relief no longer provides extra relief for let periods in most cases since April 2020.
Planning strategies to reduce property CGT
- Transfer to a lower-income spouse before sale, no-gain/no-loss transfer means the gain is taxed at their lower rate and their AEA is used
- Pension contributions in the year of sale, reduces taxable income, creating more basic-rate band headroom so more of the gain is taxed at 18%
- Use capital losses, losses from other disposals in the same year reduce the property gain before the AEA
- Joint ownership, property owned jointly by spouses means each person pays CGT on their half, each using their own AEA and rate
- Timing, if proceeds are near year-end, ensure completion is in the optimal tax year relative to income changes
Calculate your property CGT
Enter your property sale details and income into our calculator for an instant 2026/27 CGT estimate.
Property CGT CalculatorFrequently asked questions
What is the CGT rate on property in 2026/27?
18% for gains within the basic-rate band, 24% for gains in the higher-rate band. These rates apply to second homes, buy-to-let and inherited property. They replaced the previous 28% higher rate from October 2024.
Do I pay CGT when selling my main home?
Usually no. Private Residence Relief (PRR) exempts the gain on your only or main home. PRR applies in full if the property was your main home throughout ownership. It applies partially if you only lived there for part of the period.
How long do I have to report a property gain?
60 days from the completion date. Use HMRC's online UK property reporting service. Failure to report within 60 days results in an automatic £100 penalty plus interest on unpaid tax.
Can I deduct stamp duty from my CGT gain?
Yes. Stamp duty paid on purchase is an allowable acquisition cost and reduces your CGT gain.
What counts as an improvement for CGT purposes?
Capital works that enhance the property: extensions, loft conversions, adding a bathroom. Normal maintenance and redecoration are not allowable improvement costs.
This page is for general information only and is not tax or legal advice. Consult a qualified tax adviser before making disposal decisions.
Sources & references
The rates, allowances and rules in this guide are drawn from the official HMRC and GOV.UK sources below, checked for the 2026/27 tax year. Each link opens the relevant government page in a new tab.
- Tax when you sell property www.gov.uk/tax-sell-property
- Capital Gains Tax: rates www.gov.uk/capital-gains-tax/rates
- Tax when you sell your home (Private Residence Relief) www.gov.uk/tax-sell-home
- Report and pay Capital Gains Tax on UK property www.gov.uk/report-and-pay-your-capital-gains-tax
- Tax when you sell property: work out your gain www.gov.uk/tax-sell-property/work-out-your-gain