How Capital Gains Tax on property works in the UK
In the UK, when you sell or dispose of a residential property that is not your primary residence, any profit is subject to Capital Gains Tax (CGT). Properties qualifying as your main residence throughout your period of ownership typically qualify for 100% Private Residence Relief (PRR) and are completely exempt from CGT.
However, buy-to-let properties, holiday homes, inherited residences, and second homes attract residential CGT rates. For sales completing on or after 6 April 2024, residential property gains are taxed at 18% within your unused basic income tax band and 24% (lowered from 28% in the Spring Budget) within the higher and additional rate tax bands.
Worked example of property Capital Gains Tax
Consider an individual selling a buy-to-let flat with a net capital gain of £20,000.00 after allowable costs. The seller has other annual taxable income of £30,000.00. First, the statutory £3,000.00 Annual Exempt Amount (AEA) is deducted from the gain, leaving £17,000.00 in net taxable gain.
The basic rate band ceiling is £37,700.00. With £30,000.00 of taxable earnings already utilizing the band, £7,700.00 of unused basic rate capacity remains. The first £7,700.00 of property gain is taxed at 18%, producing £1,386.00. The remaining £9,300.00 of gain crosses into the higher rate band and is taxed at 24%, producing £2,232.00. Total Capital Gains Tax payable is £3,618.00, representing an effective tax rate of 18.09% and leaving £16,382.00 in net retained proceeds.
Allowable costs, improvements and capital losses
You can reduce your taxable capital gain by deducting legitimate acquisition and disposal costs. Allowable deductions include solicitor and conveyancing fees, estate agent commission, Stamp Duty Land Tax (SDLT) paid upon original purchase, surveyor valuation costs, and advertising expenses.
Capital expenditure on capital improvements (such as adding an extension, converting a loft, or installing central heating where none existed) is fully deductible. However, routine maintenance and redecorating costs are revenue expenses and cannot be offset against capital gains. If you have registered capital losses from other disposals, these can also reduce your taxable gain.
The 60-day HMRC reporting and payment deadline
Under HMRC rules, UK residents who realize a capital gain on the disposal of UK residential property must report the disposal online and pay the estimated Capital Gains Tax within 60 calendar days of the conveyancing completion date.
Failing to report and pay within the 60-day window triggers automatic late filing penalties and HMRC interest charges. Non-residents must report all UK property disposals within 60 days, even if no tax is due.
For investments, shares, and business asset disposals, visit our general Capital Gains Tax calculator.
To check your income tax bands and Personal Allowance, use the UK income tax calculator.
For inherited residential properties and estate planning, explore our UK inheritance tax calculator.
Inputs for the property gain tax calculator
Tax year
The UK tax year in which the residential property was sold or transferred.
Asset type
Classification of the property or asset sold, applying residential property CGT rates.
Total capital gain
Net profit from the property sale after deducting purchase price, stamp duty, and legal fees.
Allowable losses
Registered capital losses from previous disposals used to reduce your net taxable gain.
Annual taxable income
Your annual income minus Personal Allowance, used to determine your unused basic rate tax band.
Taxpayer status
Individuals qualify for the full annual exempt allowance; trustees receive a halved allowance.
CALCULATOR QUESTIONS
UK property capital gains tax calculator questions
What is the Capital Gains Tax rate on UK residential property?
Residential property capital gains are taxed at 18% for basic rate taxpayers and 24% for higher or additional rate taxpayers. These rates apply to gains exceeding the £3,000 annual exempt allowance.
Do I pay Capital Gains Tax when selling my own home?
Usually no. If the home was your sole primary residence throughout your ownership, you qualify for 100% Private Residence Relief (PRR) and owe zero Capital Gains Tax.
What is the deadline for paying property Capital Gains Tax?
You must report the sale and pay any Capital Gains Tax due to HMRC within 60 days of the completion date using the official online Capital Gains Tax on UK property service.
What can I deduct from my property capital gain?
You can deduct original purchase costs, SDLT stamp duty, estate agent fees, solicitor fees, surveyor fees, and the cost of capital improvements such as extensions or structural renovations.
What is the annual CGT allowance for property sales?
The UK Capital Gains Tax annual exempt amount is £3,000 per individual (£1,500 for trusts). Gains up to £3,000 are completely free of tax.