Stamp duty, solicitor, survey
Estate agent, solicitor
Extensions, conversions — not routine maintenance
Fractional years allowed (e.g. 2.5 for two and a half years)
Enter your property details and click Calculate CGT to see your full CGT breakdown.
For guidance only. Always verify CGT liability with HMRC or a tax adviser. Rates correct as of 2025/26.
How Capital Gains Tax on Property Works (2026)
Capital Gains Tax (CGT) is charged on the profit you make when selling a property that is not your main home. This includes buy-to-let properties, second homes, inherited properties you have not lived in, and commercial property. Your main residence (the home you live in) is exempt under Private Residence Relief.
The taxable gain is calculated as: sale price minus purchase price minus allowable costs (stamp duty paid on purchase, solicitor fees, improvement costs, selling agent fees). You then deduct your annual Capital Gains Tax-Free Allowance before applying the tax rate.
CGT Rates on Residential Property (2026)
| Tax Band | Residential Property Rate | Other Assets Rate |
|---|---|---|
| Basic rate taxpayer (up to £50,270) | 18% | 10% |
| Higher/additional rate taxpayer | 24% | 20% |
Residential property CGT rates are higher than other assets. The rate depends on your total taxable income in the year of sale.
CGT Worked Example: Selling a BTL Property
| Item | Amount |
|---|---|
| Sale price | £350,000 |
| Purchase price (2016) | −£220,000 |
| SDLT paid on purchase | −£8,100 |
| Improvement costs (new kitchen, extension) | −£35,000 |
| Selling costs (agent + solicitor) | −£6,500 |
| Total gain | £80,400 |
| Annual CGT allowance (2025/26) | −£3,000 |
| Taxable gain | £77,400 |
| CGT at 24% (higher rate) | £18,576 |
What Changed in 2026
The annual CGT-free allowance was cut from £6,000 to £3,000 from April 2024. This is the lowest level since the allowance was introduced and means most property sellers now pay CGT on nearly all of their gain.
CGT rates on residential property increased in the Autumn Budget 2024: the lower rate rose from 18% to 18% (unchanged) and the higher rate rose from 28% to 24% (actually reduced). This means higher-rate taxpayers now pay slightly less CGT on property gains than before.
The 60-day reporting and payment deadline remains in effect. You must report the disposal and pay estimated CGT to HMRC within 60 days of completion (not exchange). Late reporting incurs penalties starting at £100, plus interest on unpaid tax.
Property Investment Tax Tools
CGT is one part of the tax picture for property investors. Use these tools for a complete view:
- Rental Yield Calculator — calculate annual yield on a BTL property, which should be weighed against CGT liability on eventual sale.
- Additional Property SDLT Calculator — SDLT paid on purchase is an allowable CGT deduction. Calculate it accurately to reduce your future CGT bill.
- Stamp Duty Calculator — compare SDLT across all buyer types and nations for your next investment purchase.
- Mortgage Calculator — estimate BTL mortgage costs to assess net profitability alongside CGT implications.
- Property Value Estimator — check current market value to estimate potential CGT liability before deciding to sell.
✅ CGT rates verified against HMRC guidance, March 2026. This calculator is for guidance only. CGT calculations can be complex — consult a qualified tax adviser for disposals involving mixed-use property, non-UK residents, or trusts.
Worked Examples
Example 1 — BTL Sold for £350,000
Purchase price: £200,000
Improvements: £15,000 • Costs: £8,000
Gain: £350,000 – £223,000 = £127,000
Annual exempt: £3,000 → Taxable: £124,000
CGT (higher rate 24%): £29,760
Example 2 — Basic-Rate Taxpayer
Gain: £50,000 • Exempt: £3,000
Taxable gain: £47,000
£10,000 at 18% = £1,800
£37,000 at 24% = £8,880
Total CGT: £10,680
Example 3 — Joint Ownership Sale
Total gain: £180,000 → £90,000 each
Each gets £3,000 exempt → £87,000 taxable
Higher rate 24% each: £20,880
Combined CGT: £41,760
Common Mistakes to Avoid When Calculating Property CGT
- Missing the 60-day reporting deadline. Since April 2020, UK residents must report and pay CGT on residential property disposals within 60 days of completion. Late filing triggers an automatic £100 penalty, with further fines and interest accruing after 6 and 12 months.
- Forgetting to deduct allowable costs. Stamp duty paid on purchase, solicitor fees, estate agent fees, and qualifying improvement costs (extensions, new kitchens — but not routine maintenance) are all deductible. Omitting these inflates your taxable gain unnecessarily.
- Not claiming Private Residence Relief (PRR) correctly. If the property was your main home for part of the ownership period, you are entitled to PRR for those years plus the final 9 months automatically. Many sellers fail to claim partial PRR on properties that were once their home.
- Using the wrong tax rate band. CGT on residential property is 18% for basic-rate taxpayers and 24% for higher/additional-rate taxpayers (2025/26). Your CGT rate depends on your total taxable income plus the gain, so part of the gain may fall in the basic-rate band and part in the higher-rate band.
- Overlooking the reduced Annual Exempt Amount. The CGT annual exemption dropped to £3,000 for 2025/26 (down from £6,000 in 2023/24 and £12,300 in 2022/23). Many online guides still quote the old figure, leading sellers to under-calculate their liability.
5 Steps to Calculate and Pay Property CGT
- Establish your gain. Take the sale price and subtract the original purchase price, stamp duty paid on acquisition, solicitor fees (both purchase and sale), estate agent fees on the sale, and qualifying improvement expenditure. The result is your net gain.
- Apply any reliefs. Deduct Private Residence Relief if the property was your main home for any period. Deduct lettings relief (up to £40,000) if you lived in the property and also let it out. Married couples can transfer between spouses at no gain/no loss to optimise who reports the disposal.
- Subtract the Annual Exempt Amount. For 2025/26 the CGT annual exemption is £3,000 per person. Joint owners each receive their own £3,000 allowance against their share of the gain.
- Calculate the tax due. Work out how much of your remaining taxable income falls in the basic-rate band (£37,700 for 2025/26). Any gain within that band is taxed at 18%; any gain above it is taxed at 24%.
- Report and pay within 60 days. File a “report and pay Capital Gains Tax on UK property” return via your Government Gateway account within 60 days of the completion date. You must still include the gain on your Self Assessment return for the tax year.
CGT on Property: Tax at Different Gain Levels (2025/26)
The table shows indicative CGT liability for a single owner with no other capital gains in the tax year, after the £3,000 annual exemption. Assumes the basic-rate band has not been used by other income beyond the personal allowance.
| Net Gain (after costs) | Basic-Rate Taxpayer (18%) | Higher-Rate Taxpayer (24%) |
|---|---|---|
| £20,000 | £3,060 | £4,080 |
| £50,000 | £8,460 | £11,280 |
| £100,000 | £17,460 | £23,280 |
| £150,000 | £26,460 | £35,280 |
| £200,000 | £35,460 | £47,280 |
| £300,000 | £53,460 | £71,280 |
Basic-rate figures assume the full basic-rate band (£37,700) is available for the gain. In practice, if your salary uses part of the band, some of the gain may be taxed at 24%. Use the calculator above for a personalised figure.
Did You Know?
Pro Tips for Reducing Your Property CGT Bill
- HMRC allows: you to deduct the cost of improvements that enhance the property’s value (extensions, loft conversions, new bathrooms) but not routine repairs or maintenance. Keep all invoices and receipts — they could be worth thousands in tax savings years later.
- Tax accountants recommend: splitting a sale across two tax years where possible. If you exchange contracts before 5 April but complete after, the gain falls into the new tax year, giving you a fresh £3,000 annual exemption and potentially a lower rate if your income changes.
- Property solicitors advise: obtaining a professional valuation at the point a property stops being your main residence. This establishes the base cost for the non-PPR portion of any future gain and can significantly reduce the taxable amount.
- Financial planners suggest: if you are a couple selling a jointly-owned buy-to-let, ensure both names are on the title. Each owner gets their own £3,000 exemption and their own basic-rate band, which on a £100,000 gain could save up to £4,440 compared to single ownership.
Potential Savings
Claim All Allowable Costs
On a property bought for £200,000 and sold for £350,000, deducting £12,000 in stamp duty, £4,000 in legal fees and £25,000 in improvement costs reduces the taxable gain from £150,000 to £109,000 — saving a higher-rate taxpayer up to £9,840 in CGT.
Transfer to a Basic-Rate Spouse
Transferring a buy-to-let to a basic-rate spouse before sale means the entire gain is taxed at 18% instead of 24%. On a £80,000 taxable gain, this saves £4,620 compared to the higher-rate taxpayer selling alone.
Use Joint Ownership Exemptions
Two joint owners each receive a £3,000 annual exemption, sheltering £6,000 of gain instead of £3,000. At the 24% higher rate, this double exemption saves £720 every tax year — a small but free benefit simply for having both names on the title.
Capital Gains Tax on Property — FAQs
Common questions about CGT rates, PPR relief, the 60-day deadline and deductible costs for UK property sales.