Capital Gains Tax on Property 2026/27: Rates, Reliefs and the 60-Day Rule
By Major Accountancy Editorial Team · Reviewed by Shamayun Chowdhury · Last reviewed: October 2026 · Applies to the 2026/27 tax year
You are selling a flat you used to let, or a house you inherited, and the first question is how much of the profit HMRC will take. This guide explains capital gains tax on property for 2026/27 in plain English: who pays it, how the rates work, what you can deduct, and the 60-day deadline that catches many sellers out.
Capital gains tax on property is a tax on the profit when you sell or give away a property that isn’t your main home. In 2026/27 it is 18% on gains within your basic rate band and 24% above it, after a £3,000 allowance. UK residential sales must be reported and paid within 60 days of completion.
- Buy-to-let flats, second homes, land and inherited property can all trigger CGT when sold.
- Your main home is usually exempt under Private Residence Relief.
- Rates for 2026/27 are 18% and 24%, and the tax-free allowance is £3,000.
- Selling and buying costs and improvement works reduce the gain. Repairs and decorating do not.
- You have 60 days from completion, not exchange, to report and pay.
What is capital gains tax on property?
Capital gains tax on property is charged on the gain you make when you dispose of a property that isn’t your home. The gain is broadly the sale price minus what you paid and certain costs. You only pay tax on the part of your total gains above the £3,000 annual allowance.
“Dispose of” covers more than a sale. Giving a property away, swapping it or receiving compensation for it can all count. GOV.UK’s guide to tax when you sell property gives buy-to-let homes, business premises, land and inherited property as typical examples.
The tax is personal. If you own a property jointly, you work out the gain only on your share. Each owner then uses their own allowance and their own tax band, which is why joint ownership can change the final bill.
Do you pay CGT on a house sale?
You do not usually pay CGT when you sell the home you have always lived in. You normally do pay it when you sell a second home, a buy-to-let or an inherited house that has risen in value. Gifts to a spouse or civil partner are generally free of CGT.
The answer to “do you pay CGT on a house sale?” depends on how you used the property. Use this table as a first check.
| What you are selling | CGT due? | Key point |
|---|---|---|
| Your only home, lived in throughout | Usually no | Private Residence Relief covers the whole gain if all the conditions are met |
| A former home you later let out | Partly | Relief covers the years you lived there plus the final 9 months |
| Buy-to-let or second home | Yes, on the gain | 18% or 24% after the £3,000 allowance |
| Inherited property | Only on growth since death | Your starting value is usually the probate value |
| Gift to a child or relative | Yes, as if sold | HMRC uses market value, even though no money changed hands |
| Transfer to a spouse or civil partner | Generally no | The receiving partner takes over the original cost |
Sources: Work out your gain and Tax when you sell your home (GOV.UK), checked October 2026.
Capital gains tax on property rates and allowance for 2026/27
For 2026/27, capital gains tax on property is charged at 18% on any gain that fits inside your unused basic rate band and 24% on the rest. Everyone gets a £3,000 annual exempt amount first. Trustees and personal representatives pay 24% on all taxable gains.
| Item | 2026/27 |
|---|---|
| Annual exempt amount (individuals) | £3,000 |
| Rate on gains within the basic rate band | 18% |
| Rate on gains above the basic rate band | 24% |
| Trustees and personal representatives | 24% |
| Basic rate band (England, Wales and NI) | £37,700 of taxable income |
Source: Capital Gains Tax rates (GOV.UK). CGT on residential property has been charged at 18% and 24% since April 2024.
How the 18% and 24% split works
For capital gains tax on property, your gain sits on top of your taxable income. Whatever is left of the £37,700 basic rate band after your income is taxed at 18%. Anything beyond that is taxed at 24%. A higher-rate taxpayer has no band left, so the whole taxable gain is charged at 24%.
Scotland sets its own Income Tax bands, but capital gains use the UK basic rate band. If you live in Scotland, ask an adviser to confirm how much of the band is left before you estimate your bill.
How to work out the gain on a property sale
Start with the sale price, take off the purchase price, then deduct the allowable costs of buying, improving and selling. The result is your gain. Take off any losses and the £3,000 allowance, and the rest is taxed at 18% or 24%.
The capital gains on property sale figure is not the same as the profit you see in your bank account. Mortgage repayments, for example, play no part in the calculation. If you received the property as a gift, or inherited it without an Inheritance Tax value, you use the market value at that date as your starting cost.
Costs you can and can’t deduct
| Usually deductible | Not deductible |
|---|---|
| Solicitor and conveyancing fees when buying and selling | Mortgage interest and repayments |
| Estate agent fees | Redecorating and routine repairs |
| Stamp Duty Land Tax paid on purchase | Costs already claimed against rental income |
| Improvements, such as an extension or loft conversion | Your own time and labour |
Source: Work out your gain (GOV.UK).
Illustrative example: selling a buy-to-let
Priya lives in England and earns £35,000 a year. In 2026/27 she sells a buy-to-let flat for £300,000, paying £4,500 in selling fees. She bought it for £180,000, paid £3,000 in buying costs and spent £20,000 on an extension. She has no other gains or losses.
- Gain: £300,000 − £4,500 − £180,000 − £3,000 − £20,000 = £92,500
- Less the £3,000 allowance: taxable gain of £89,500
- Basic rate band left: £37,700 − (£35,000 − £12,570) = £15,270
- £15,270 × 18% = £2,748.60, and £74,230 × 24% = £17,815.20
- Capital gains tax on property sale: £20,563.80, due within 60 days of completion
If Priya had owned the flat jointly with her husband, each of them would work out the gain on half and use their own allowance and band. That alone would reduce the total bill. The same logic applies to capital gains on sale of property held by business partners or siblings. Our landlord and property tax service can model the figures before you sell.
Selling your home: Private Residence Relief
Private Residence Relief removes capital gains tax on property you have lived in as your only or main home for the whole time you owned it. If you lived elsewhere for part of that time, or let the home out, the relief covers only the qualifying years and the gain on the rest is taxable.
According to GOV.UK’s guidance on selling your home, full relief needs all of these to apply:
- You have one home and have lived in it as your main home for all the time you owned it.
- You have not let part of it out (a lodger does not count).
- You have not used part of it only for business.
- The grounds, including buildings, total less than 5,000 square metres.
- You did not buy it just to make a gain.
Married couples and civil partners can only have one main home between them at any time.
The final 9 months, and absences that count
The last 9 months of ownership always qualify, as long as the property was your main home at some point. This gives you time to sell after moving out. The period is 36 months if you are disabled or in long-term residential care.
Some time away also counts as living there, under HMRC’s absence rules. If you have one home or have nominated it, up to 3 years away for any reason, up to 4 years working elsewhere in the UK, and any period working abroad can all qualify. You normally need to have lived in the home before and after the absence.
Letting relief after 2020
Many sellers still expect letting relief on a former home that they later let out. Since April 2020 it only applies if you lived in the property at the same time as your tenants. Even then, it is capped at the lowest of the Private Residence Relief you get, £40,000, or the gain on the let part, as set out in GOV.UK’s letting guidance.
Reporting and paying capital gains tax on property within 60 days
If you are a UK resident and sell UK residential property with tax to pay, you must report the sale and pay the estimated tax within 60 days of completion. You do this through a Capital Gains Tax on UK property account. Late reports and late payments attract penalties and interest.
The rules for capital gains tax on sale of property in the UK are on GOV.UK’s report and pay page. You don’t need to report online if your total gains for the year fall within the £3,000 allowance. Non-residents must report every UK property sale by the deadline, even if no tax is due.
Completion date vs exchange date
For capital gains tax on property, the 60 days run from the date you stopped owning it, which is completion. Exchange of contracts does not start the clock. A sale that completes on 15 January 2027, for instance, must be reported and paid by 16 March 2027.
| What to have ready | Why HMRC needs it |
|---|---|
| Property address and dates of purchase and completion | To identify the disposal and the 60-day window |
| Purchase price and sale price (or market values) | To calculate the gain |
| Invoices for fees and improvements | To support the costs you deduct |
| An estimate of your income for the tax year | To decide how much is taxed at 18% or 24% |
When you also need Self Assessment
If you are already registered for Self Assessment, you must also include the sale on your tax return, even though you have already paid capital gains tax on property through the 60-day account. The 60-day payment then counts towards your final bill, which is settled through the return. Our guide on paying Self Assessment tax online explains how that payment works.
Common mistakes with CGT on property
| Mistake | What it costs | How to avoid it |
|---|---|---|
| Counting 60 days from exchange, not completion, or forgetting the deadline | Late filing penalties and interest | Diary the completion date plus 60 days as soon as you exchange |
| Deducting repairs or mortgage interest | The gain is understated and tax is underpaid | Deduct only buying and selling costs and genuine improvements |
| Using the old letting relief rules | Up to £40,000 of relief claimed in error | Since April 2020, only shared occupancy qualifies |
| Gifting property to a child without valuing it | CGT still falls due on market value | Get a professional valuation at the date of the gift |
| Losing invoices for an extension | You can’t prove the cost if HMRC asks | Keep improvement records for as long as you own the property |
The clients who pay most are rarely those with the biggest gains. They are the ones who sell in a high-income year, or hold the property in one name when two names would have used two allowances and two basic rate bands. If a sale is a year or two away, plan the timing and ownership first, because capital gains tax on property is far easier to manage before exchange than after, and take advice before you transfer anything.
Capital gains tax on property FAQs
What is the capital gains tax rate on residential property in 2026/27?
Capital gains tax on residential property is 18% on gains within your unused basic rate band and 24% on gains above it. Trustees and personal representatives pay 24%. The first £3,000 of an individual’s total gains is tax-free.
Do you pay CGT on a house sale if it was your main home?
Usually not. Private Residence Relief covers the gain if it was your only or main home throughout, you didn’t let it or use part only for business, and the grounds are under 5,000 square metres.
How long do I have to pay capital gains tax on property?
UK residents must report and pay within 60 days of the completion date when there is tax to pay on a UK residential property sale.
Can I reduce capital gains when selling a house?
Yes, legitimately. Deduct buying and selling costs and improvement costs, use your £3,000 allowance and any losses, and check whether Private Residence Relief applies for the years you lived there.
Do I pay CGT on an inherited property?
Only on any rise in value after the date of death. Your starting value is usually the value used for Inheritance Tax.
Is there CGT when I give a property to my spouse?
Transfers between spouses or civil partners who live together are generally free of CGT. Your partner takes over your original cost for a later sale.
Final verdict: capital gains tax on property in one page
Capital gains tax on property applies to most sales other than your own home, including capital gains tax on selling property you once lived in and later let. In 2026/27 it is 18% or 24% after a £3,000 allowance, on the gain left once purchase, sale and improvement costs are deducted. Diary the 60-day deadline from completion and keep every invoice.
- Gather the purchase and sale figures, fees and improvement invoices.
- Work out how much of your basic rate band is left for the tax year of completion.
- Need the 60-day return filed? See our capital gains tax service, call 0116 4030595 or email info@majoraccountancy.com.
See our CGT service
or call 0116 4030595 · info@majoraccountancy.com
- Written by the Major Accountancy Editorial Team and reviewed by Shamayun Chowdhury, a chartered management accountant (ACMA, MAAT) with more than 15 years’ UK practice experience.
- Rates, reliefs and deadlines checked against GOV.UK’s Capital Gains Tax guidance for 2026/27.
- Covers landlords, second-home owners, people selling an inherited home and homeowners who moved out.
- Last reviewed: October 2026.