Capital Gains Tax on UK Property: 60-Day Reporting, Rates and Reliefs
Selling a UK rental or second home means reporting and paying Capital Gains Tax within 60 days of completion. Here are the 2026/27 rates, how to work out the gain, and the reliefs that cut the bill.
Quick answer: When you sell a UK residential property that is not your main home, you must report and pay any Capital Gains Tax within 60 days of completion using HMRC's online Capital Gains Tax on UK property account. For the 2026/27 tax year, Capital Gains Tax on residential property is charged at 18% on gains that fall within your remaining basic-rate band and 24% above it, after deducting your £3,000 annual exempt amount and allowable costs. Miss the 60-day deadline and HMRC charges interest and penalties, even if you also report the sale later on a Self Assessment return.
Capital Gains Tax is the tax you pay on the profit when you sell an asset that has risen in value, and for landlords and property investors it is the single largest bill most will face on exit. The rules for UK residential property are stricter than for shares or other assets: a short reporting window, a separate online account, and higher rates. This guide explains what Capital Gains Tax you owe when you sell a UK rental or second property, how the 60-day reporting deadline works, and the reliefs that legitimately reduce the bill.
When Capital Gains Tax applies to property
Capital Gains Tax on residential property applies when you dispose of a property that has gone up in value and is not fully covered by Private Residence Relief. "Disposal" usually means a sale, but it also covers gifting a property, transferring it to someone other than a spouse or civil partner, or receiving an insurance payout for a destroyed property. The main situations where a bill arises are:
- Selling a buy-to-let or other rental property.
- Selling a second home or holiday home.
- Selling a property you inherited and did not live in as your main home.
- Selling a home that was your main residence for only part of the time you owned it.
Your own main home is normally exempt through Private Residence Relief, so most people pay no Capital Gains Tax when they sell the house they live in. Companies do not pay Capital Gains Tax at all: a limited company selling property pays Corporation Tax on the gain instead, which is one reason the personal-versus-company decision matters so much and why we built the limited company vs personal calculator.
Capital Gains Tax rates on property for 2026/27
Capital Gains Tax on residential property is charged at two rates, and which one applies depends on your other taxable income in the same tax year. After deducting the annual exempt amount, you add the taxable gain on top of your income:
| Your position | Capital Gains Tax rate on residential property (2026/27) |
|---|---|
| Gain falling within your unused basic-rate band | 18% |
| Gain above the basic-rate band (higher and additional rate) | 24% |
The 24% higher rate was reduced from 28% on 6 April 2024, so anyone comparing older guidance should check the date. The annual exempt amount for 2026/27 is £3,000: the first £3,000 of total gains across the tax year is tax-free. You can confirm the current figures on the GOV.UK Capital Gains Tax rates page. Because the taxable gain stacks on top of your income, a landlord who is a basic-rate taxpayer on salary can still pay 24% on most of a large property gain once that gain pushes total income above the higher-rate threshold.
How to calculate the gain
The gain is not simply the sale price minus the purchase price. You start with the sale proceeds, then deduct the original purchase price, the costs of buying and selling, and the cost of any capital improvements. What you can deduct:
- Stamp Duty Land Tax paid when you bought the property.
- Solicitor and conveyancing fees on both purchase and sale.
- Estate agent fees on the sale.
- Capital improvements such as an extension, a new kitchen where none existed, or a loft conversion. Routine repairs and maintenance do not count, because those are already deductible against rental income.
Subtract the £3,000 annual exempt amount from the result, and what remains is the taxable gain. To see the numbers for a specific sale, run them through our Capital Gains Tax calculator before you commit to a completion date.
The 60-day reporting deadline
This is where many landlords get caught. For UK residential property sold on or after 27 October 2021, you must report the disposal and pay the estimated Capital Gains Tax within 60 days of the completion date, using HMRC's Report and pay Capital Gains Tax on UK property service. The deadline runs from completion, not exchange, and not from the end of the tax year.
Two points trip people up. First, the 60-day return is separate from Self Assessment: if you normally file a tax return, you still report the property gain within 60 days and again on the annual return, with the earlier payment credited. Second, a UK resident with no tax to pay, because the gain is covered by reliefs or the annual exempt amount, generally does not need to file the 60-day return, but a non-resident must report every disposal of UK land whether or not tax is due. Miss the deadline and HMRC applies interest from day 61 plus fixed and, eventually, percentage-based penalties.
Reliefs that reduce the bill
Two reliefs matter most to property owners. Private Residence Relief exempts the period a property was genuinely your only or main home, plus the final nine months of ownership regardless of whether you lived there at the end. If you lived in a property and later let it out, the calculation is apportioned between the exempt and chargeable periods, and the detail is set out in the HMRC Private Residence Relief helpsheet.
Lettings Relief is far narrower than it once was. Since 6 April 2020 it applies only where you shared occupancy of the property with your tenant, so the classic "live in it, then rent it out, then sell" pattern no longer qualifies. Transfers between spouses and civil partners are exempt at the point of transfer, which lets couples use both annual exempt amounts and both basic-rate bands on a later sale, a legitimate planning step worth taking before you market a property.
Frequently Asked Questions
Do I pay Capital Gains Tax when I sell my own home?
Usually not. Private Residence Relief exempts a property that was your only or main home for the whole time you owned it. A bill can arise if you let part of it, used part exclusively for business, or the grounds exceed half a hectare.
Is the 60-day deadline from exchange or completion?
Completion. You have 60 days from the completion date to report and pay Capital Gains Tax on UK residential property, regardless of when contracts were exchanged.
What happens if I miss the 60-day deadline?
HMRC charges interest on the unpaid Capital Gains Tax from day 61 and issues late-filing penalties. Reporting the same gain later on a Self Assessment return does not remove the penalty for missing the 60-day return.
Can I offset rental losses against a property gain?
No. Rental losses are income losses and are carried forward against future rental profit. They cannot reduce a capital gain. Only capital losses, such as a loss on selling another property or asset, can be set against a capital gain.
Do limited companies pay Capital Gains Tax on property?
No. A company pays Corporation Tax on its chargeable gains, not Capital Gains Tax, and there is no annual exempt amount for companies. Whether to hold property personally or through a company is a wider decision covered by our limited company vs personal calculator.
Key Takeaways
- Report and pay Capital Gains Tax on UK residential property within 60 days of completion through HMRC's online account.
- For 2026/27 the rates on residential property are 18% within your basic-rate band and 24% above it, after a £3,000 annual exempt amount.
- Deduct purchase price, buying and selling costs, and capital improvements, but not routine repairs, when working out the gain.
- Private Residence Relief covers a genuine main home plus the final nine months; Lettings Relief now applies only to shared occupancy.
- Transferring a share to a spouse before sale can use both annual exempt amounts and both basic-rate bands.
This article is general information, not tax advice. Capital Gains Tax depends on your personal circumstances and the rules can change. Confirm the current position on GOV.UK and speak to a qualified accountant or tax adviser before selling a property.