Selling a property can be a significant financial event, and for many people, it triggers a Capital Gains Tax (CGT) liability. This guide explains how CGT applies to property disposals for the 2026/27 tax year, including the special rules for residential property and the important 60-day reporting deadline.
For a complete overview of CGT, see our Capital Gains Tax Guide. For more expert tax guidance, visit our homepage.
When Does CGT Apply to Property?
You pay CGT when you sell or dispose of a property that is not your main home. This includes:
Buy-to-let properties
- Residential properties you rent out.
Second homes
- Holiday homes or properties you own but don’t live in as your main residence.
Land
- Including land with or without planning permission.
Commercial property
- Shops, offices, and industrial units.
Overseas property
- Properties located outside the UK.
Important: If the property is your main home, you may be eligible for Private Residence Relief, which can reduce or eliminate your CGT liability.
CGT Rates for Property in 2026/27
From 6 April 2026, the rates for residential property CGT have been aligned with those for other assets.
| Taxpayer Type | CGT Rate |
|---|---|
| Basic Rate Taxpayer | 18% |
| Higher/Additional Rate Taxpayer | 24% |
Key Update: All chargeable gains for individuals are now taxed at 18% or 24%, whether the asset is property or other assets.
The 60-Day Reporting Rule
Since 6 April 2020, there is a strict deadline for reporting and paying CGT on UK residential property.
- Deadline: You must report and pay CGT within 60 days of completion.
- How to Report: Use the UK Property Account on GOV.UK.
- Penalties: Late reporting and payment can result in penalties and interest.
Important: The 60-day deadline applies even if you have no CGT to pay (e.g., because of Private Residence Relief). You must still report the disposal.
For a full guide on reporting, see our Reporting Capital Gains article.
Private Residence Relief (PPR)
If the property has been your main home at any time, you may be eligible for Private Residence Relief. This can significantly reduce your CGT bill.
How PPR Works
- Period of Occupation: The gain relating to the period you lived in the property as your main home is exempt from CGT.
- Final 9 Months: The final 9 months of ownership are always exempt, even if you weren’t living there.
- Lettings Relief: If you let out a property that was once your main home, you may be eligible for Lettings Relief (though this is now more restricted).
Calculating PPR
The calculation can be complex. You need to work out the proportion of the gain that relates to your period of occupation.
Calculating Your Property Gain
Step 1: Calculate the Sale Proceeds
- The sale price of the property.
- Deduct any selling costs (e.g., estate agent fees, legal fees, advertising costs).
Step 2: Calculate the Purchase Costs
- The original purchase price.
- Add any purchase costs (e.g., stamp duty, legal fees, survey fees).
- Add the cost of any improvements (e.g., extensions, new kitchen).
Step 3: Subtract the Costs from the Proceeds
- This gives you the gain.
Step 4: Deduct Your Annual Exempt Amount
- Deduct £3,000 from the gain. See our guide: Capital Gains Allowance.
Step 5: Apply the CGT Rate
- Apply the 18% or 24% rate.
Example Calculation: Buy-to-Let Property
- Sale price: £350,000
- Selling costs: £6,000 (legal, estate agent)
- Net sale proceeds: £344,000
- Purchase price: £200,000
- Purchase costs: £8,000 (stamp duty, legal, survey)
- Improvements: £15,000 (extension)
- Total purchase costs: £223,000
- Gain: £344,000 – £223,000 = £121,000
- Annual Exempt Amount: £3,000
- Taxable gain: £118,000
- CGT (assuming higher rate taxpayer): £118,000 × 24% = £28,320
Overseas Property
If you sell an overseas property, you may be liable to UK CGT on the gain. The rules are similar to UK property, and you may also be entitled to double taxation relief if you pay tax abroad. See our guide: Overseas Property Tax.
How We Can Help
Property CGT can be complex, especially with the 60-day reporting deadline and reliefs like PPR. Our ACCA-qualified accountants can:
- Calculate your CGT liability accurately.
- Identify reliefs and allowances you may be eligible for.
- Help you report and pay CGT within the 60-day deadline.
- Advise on tax-efficient property disposal strategies.
Let us help you manage your property CGT liability.
📚 Related Guides
• Capital Gains Tax Guide
• Capital Gains Tax for Landlords
• Overseas Property Tax
• Property owners and landlords
• Joint Property Ownership Tax
• Capital Gains Tax Calculator
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