Capital Gains Tax on Property Calculator

If you sell a property that isn't your main home, such as a buy-to-let, a holiday home or an inherited house, you may have to pay capital gains tax (CGT) on the profit. The rules are straightforward once you break them down, but the deadlines are short and the bill can be large.

This guide covers when CGT applies, how to work out the gain, the rates for the 2026/27 tax year and how to report it. You can estimate your own bill with the capital gains tax on property calculator.

When do you pay capital gains tax on property?

CGT is a tax on the gain, or profit, you make when you dispose of an asset that has gone up in value. For property, you may need to pay it when you sell or give away:

• A buy-to-let or other rental property
• A second home or holiday home
• Business premises
• Land
• An inherited property that has risen in value since the date of death

You usually don't pay CGT when you sell your main home, thanks to Private Residence Relief, as long as it's been your only or main residence for the whole time you've owned it, the garden and grounds are under 5,000 square metres, and you haven't used part of it exclusively for business.

Gifts between spouses or civil partners who live together don't trigger CGT. The receiving partner takes on the original cost.

How to work out the gain

The gain is broadly the sale price minus what it cost you, including allowable costs:

• Sale price, or market value if you gave it away or sold to a relative cheaply
• Minus the purchase price, or the market value when you inherited it
• Minus buying costs, such as stamp duty, solicitor and survey fees
• Minus selling costs, such as estate agent and solicitor fees
• Minus improvement costs, such as an extension, loft conversion or new kitchen

Repairs and maintenance, like repainting or fixing a boiler, aren't deductible from the gain. For a rental property, those are usually claimed against rental income instead.

The annual exempt amount

Everyone has an annual exempt amount for capital gains. For the 2026/27 tax year it's £3,000. Gains below this are tax-free. It can't be carried forward, and spouses or civil partners each have their own.

Capital gains tax rates on residential property

For 2026/27, CGT on residential property is charged at:

Your gain is added on top of your taxable income for the year. Whatever part of the £37,700 basic rate band your income hasn't used is available for gains at 18%. The rest is taxed at 24%.

Scotland has its own income tax bands, but capital gains tax uses the UK-wide bands, so the same rules apply wherever you live in the UK.

A worked example

Sam bought a flat to rent out for £210,000 and has now sold it for £325,000. When buying, Sam paid £6,500 in stamp duty and legal fees, and spent £12,000 on a new kitchen and bathroom. Selling costs came to £5,500. Sam's taxable income this year is £40,000.

1. Gain: £325,000 − £210,000 − £6,500 − £12,000 − £5,500 = £91,000
2. Less the annual exempt amount of £3,000: taxable gain £88,000
3. Sam's income uses £27,430 of the basic rate band, leaving £10,270.
4. £10,270 at 18% = £1,848.60
5. The remaining £77,730 at 24% = £18,655.20
6. Total CGT: £20,503.80

You can check this, and try your own figures, in the CGT on property calculator.

The 60-day reporting rule

If you sell a UK residential property and CGT is due, you must report and pay within 60 days of completion using HMRC's online "Report and pay Capital Gains Tax on UK property" service. This is separate from any Self Assessment tax return. Missing the deadline can lead to penalties and interest.

If you complete a Self Assessment return, you still include the gain on it, and the amount you paid within 60 days is credited.

Ways to reduce the tax legitimately

• Keep every receipt. Improvement costs reduce your gain, but only if you can prove them.
• Use both annual exempt amounts. Jointly owned property means each owner has their own £3,000 exemption and basic rate band.
• Time the sale. If your income will be lower in a future tax year, more of the gain may fall at 18%.
• Offset losses. Losses on other assets in the same year, or reported losses carried forward from earlier years, can reduce your gain.
• Check for Private Residence Relief. If you lived in the property as your main home for part of the time, part of the gain may be exempt, including the final nine months of ownership.

Lettings relief now only applies where you shared the home with your tenant while living there.

Inherited property

If you inherit a property, its value for CGT is the market value at the date of death, not what the person who died paid. If you sell soon after for a similar price, there may be little or no gain. A professional probate valuation is useful evidence.