Key facts
- PRR exempts all or part of the gain on your only or main residence from CGT.
- Full relief applies if the property was your main home throughout the ownership period.
- The final 9 months of ownership always qualify for PRR, even if you have moved out.
- Certain periods of absence (e.g. working overseas) are treated as periods of residence.
- If you own two homes, you may nominate which is your main residence for PRR purposes.
What Is Private Residence Relief?
Private Residence Relief (PRR) is the CGT relief that makes the sale of your main home tax-free. When you dispose of a property that has been your only or main residence throughout the period of ownership, the entire gain is exempt from CGT.[1]
If the property was not your main home for the entire period of ownership, partial PRR is available. The relief is calculated on a time-apportioned basis, exempting the portion of the gain that relates to the period of occupation.
Conditions for Full PRR
To qualify for full PRR, the following must apply:[2]
- The property was your only or main residence throughout the period of ownership
- The grounds (including the garden) do not exceed 0.5 hectares (larger grounds may qualify if “required for the reasonable enjoyment of the property”)
- The property was not acquired for the purpose of making a gain
- No part of the property was used exclusively for business purposes
Partial PRR: Time Apportionment
If PRR applies for only part of the ownership period, the gain is apportioned on a time basis:[2]
Exempt gain = Total gain × (Qualifying months ÷ Total months of ownership)
Worked Example
Helen owned a property for 120 months (10 years). She lived in it as her main home for 72 months, then rented it out for 48 months. She makes a gain of £100,000 on sale.
| Period | Months | PRR? |
|---|---|---|
| Main residence | 72 | Yes |
| Let out (final 9 months qualify) | 39 | No |
| Final 9 months (deemed occupation) | 9 | Yes |
| Total | 120 |
| Calculation | Amount |
|---|---|
| Qualifying months: 72 + 9 | 81 |
| PRR fraction: 81/120 | 67.5% |
| Exempt gain: £100,000 × 67.5% | £67,500 |
| Chargeable gain | £32,500 |
The Final Period Exemption
The last 9 months of ownership always qualify for PRR, provided the property was at some point your main home. This applies even if you have already moved out and are living elsewhere.[2]
| Date | Final Period |
|---|---|
| From 6 April 2020 | 9 months |
| 6 April 2014 – 5 April 2020 | 18 months |
| Before 6 April 2014 | 36 months |
Disabled or care home residents: The final period remains 36 months if you are moving into a care home or are disabled. This gives more time to sell the former home without losing PRR.[2]
Permitted Periods of Absence
Certain periods when you are away from the property are treated as if you were still living there (deemed occupation), provided you lived in the property before and after the absence:[3]
| Type of Absence | Maximum Period | Conditions |
|---|---|---|
| Any reason | 3 years (total) | Must return to the property afterwards |
| Working elsewhere in the UK | 4 years (total) | Must be required by employer; must return |
| Working overseas | Unlimited | All overseas employment; must return |
The “must return” requirement is waived if the reason for not returning was the terms of the individual’s employment, meaning they were required to work elsewhere.
Nominating Your Main Residence
If you own two or more properties that you use as homes, you can elect which one is your main residence for PRR purposes:[4]
- The nomination must be made within two years of first having two qualifying residences
- You can change the nomination at any time (the new nomination takes effect from the date you notify HMRC)
- A property must actually be a residence (you must live in it at least occasionally)
- Married couples and civil partners living together can only have one main residence between them
Garden and Grounds
PRR extends to the garden and grounds of the property, up to a permitted area of 0.5 hectares (approximately 1.24 acres) including the site of the house.[2]
If the total land exceeds 0.5 hectares, the excess is only covered by PRR if it is “required for the reasonable enjoyment of the property as a residence” — having regard to its size and character.
Frequently Asked Questions
Do I pay CGT when I sell my main home?
Usually no. Private Residence Relief (PRR) exempts the gain on your only or main home from CGT, provided you have lived in it as your main residence throughout ownership. If you lived there for only part of the time, partial relief is available.
What is the final period exemption?
The final 9 months of ownership always qualify for PRR, even if you have already moved to a new home. This gives you time to sell without losing the full exemption. Before 6 April 2020, the final period was 18 months.
Can I nominate which property is my main residence?
Yes. If you own two or more properties that you use as residences, you can nominate which one is your main residence for PRR. The nomination must be made within two years of first having two residences. You can change the nomination at any time.
What happens if I let out my main home?
If you let out all or part of your home, the let period will not qualify for PRR (unless you shared occupation with the tenant). However, lettings relief may provide some additional relief, and the final 9 months are always covered.
Further Reading
- Lettings Relief — additional relief for periods when the property was let
- Selling a Second Home — CGT implications for second properties
- The 60-Day CGT Property Report — reporting a property disposal to HMRC
- CGT When You Sell a Rental Property — computing the gain on a let property
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