Capital Gains Tax When You Sell Property

When CGT Applies to Property

You may owe CGT when you sell:^[1]

Buy-to-let properties
Second homes or holiday homes
Inherited property (if not your main home)
Commercial property
Land

Your main home is usually exempt thanks to Private Residence Relief.^[4]

CGT Rates for Property

Residential property is taxed at higher CGT rates than other assets:^[3]

Tax Band	Residential Property Rate
Basic rate taxpayer	18%
Higher/additional rate	24%

Calculating the Gain

Sale price − Purchase price − Allowable costs − Annual exempt amount = Taxable gain^[1]

Allowable costs include:

Stamp Duty paid on purchase
Solicitor and conveyancer fees (purchase and sale)
Estate agent fees
Improvement costs that enhanced the property (extensions, new kitchen) — but NOT repairs or maintenance
Survey fees

The 60-Day Reporting Rule

You must report and pay CGT on UK residential property within 60 days of completion using HMRC’s online CGT on UK Property service. This is in addition to reporting it on your Self Assessment return.^[2] You can complete your Self Assessment online with HMRC-recognised software.

Late reporting penalty: Missing the 60-day deadline incurs a £100 late filing penalty, with additional penalties if you’re more than 6 or 12 months late.

Private Residence Relief

If the property was your main home for the entire time you owned it, Private Residence Relief exempts the entire gain. If it was your main home for only part of the time:^[4]

The gain is apportioned based on the period it was your main home vs the total ownership period
The last 9 months of ownership always qualify for relief (even if you’d moved out)

Inherited Property

If you sell an inherited property, your base cost is the probate value (the value at the date of death), not what the deceased originally paid. The gain is the difference between the sale price and the probate value.^[1]

Losses on Property

If you sell a property at a loss, you can offset the loss against other capital gains in the same year, or carry it forward.^[5]

Frequently Asked Questions

How long do I have to report Capital Gains Tax on property?

You must report and pay CGT on UK residential property within 60 days of completion using HMRC’s online service. Missing the deadline incurs a £100 late filing penalty, with additional penalties for longer delays.

What is the CGT rate on property in the UK?

Residential property gains are taxed at 18% for basic-rate taxpayers and 24% for higher or additional-rate taxpayers. These rates are higher than CGT rates on other assets such as shares.

Do I pay CGT when I sell an inherited property?

If you sell an inherited property that is not your main home, you may owe CGT. Your base cost is the probate value (the value at the date of death), not what the deceased originally paid. The gain is the difference between the sale price and that probate value.

Is my main home exempt from Capital Gains Tax?

Yes. Private Residence Relief exempts your main home from CGT if you lived in it for the entire period of ownership. If it was your main home for only part of the time, the gain is apportioned, and the last 9 months always qualify for relief.

Sources

Tax when you sell property — GOV.UK
Report and pay Capital Gains Tax on UK property — GOV.UK
Capital Gains Tax rates — GOV.UK
Private Residence Relief — GOV.UK
Capital Gains Tax: losses — GOV.UK