When you sell a UK residential property that isn’t your main home, Capital Gains Tax is payable on the gain. For 2026/27 the rates are 18% for gains in the basic-rate band and 24% for gains above. The £3,000 annual exempt amount applies. Crucially, the report and payment are due within 60 days of completion through HMRC’s “Capital Gains Tax on UK property” service — entirely separate from Self Assessment, which still requires the disposal to be declared again on the annual return. Private Residence Relief can fully or partially exempt the gain on a property that has been your main home at some point. This calculator runs the gain calculation, the PRR fraction, the 60-day position and the final-year reconciliation.
How the property CGT calculation works
The basic formula is:
Gain = Sale price − Acquisition cost − Allowable costs − Reliefs − Annual exempt amount
Allowable costs include legal and estate agent fees on both the purchase and the sale, stamp duty paid on purchase, and the cost of capital improvements (extensions, kitchens, lofts) but not normal maintenance and repair.
Reliefs include Private Residence Relief (PRR), Lettings Relief (heavily restricted since 2020), and any losses brought forward from prior years.
Worked example: a buy-to-let bought for £180,000 in 2014, sold in 2026 for £290,000. £8,000 of legal and estate agent fees on the sale, £4,000 on purchase, £15,000 spent on a loft conversion in 2018.
- Sale price: £290,000
- Less acquisition cost: £180,000
- Less purchase costs: £4,000
- Less sale costs: £8,000
- Less capital improvements: £15,000
- Net gain: £83,000
- Less annual exempt amount: £3,000
- Taxable gain: £80,000
For a higher-rate taxpayer: £80,000 Ã, 24% = £19,200 of CGT, due 60 days after completion.
For a basic-rate taxpayer with £20,000 of basic-rate band remaining: £20,000 Ã, 18% + £60,000 Ã, 24% = £3,600 + £14,400 = £18,000.
Private Residence Relief in detail
PRR exempts the proportion of the gain that relates to periods when the property was your only or main residence, plus certain deemed-occupation periods. The rules:
- Period of actual occupation: any period when the property was your main residence is exempt.
- Final 9 months: the last 9 months of ownership are always treated as occupation, even if you’ve moved out, provided the property has been your main residence at some point.
- Allowed absences: up to 3 years of absence for any reason, up to 4 years working elsewhere in the UK, any period working abroad — all treated as occupation if you actually occupied the property before and after the absence.
- Lettings Relief: only available where you and the tenant lived in the property at the same time (eg. lodger arrangements). This was severely restricted from April 2020.
Worked example: bought a flat for £200,000 in January 2018, lived in it for 4 years, then let it out for 4 years and sold for £320,000 in January 2026.
- Total ownership: 8 years (96 months)
- Occupation: 48 months actual + 9 months final period = 57 months
- Occupation fraction: 57/96 = 59.375%
- Gross gain: £120,000
- PRR: £120,000 Ã, 59.375% = £71,250
- Gain remaining: £48,750
- Less annual exempt amount: £3,000
- Taxable: £45,750
A higher-rate taxpayer pays £45,750 Ã, 24% = £10,980.
The 60-day rule
UK residents disposing of UK residential property where CGT is payable must report and pay the CGT within 60 days of completion. This is via HMRC’s “Capital Gains Tax on UK property” service (a separate online portal, not Self Assessment). Penalties for late filing start at £100 and accrue at 6 months and 12 months. Interest on late payment runs from day 60.
The same disposal also has to go on the annual Self Assessment return, but this is for reconciliation rather than payment — any over- or under-payment versus the 60-day return is settled at that point.
Spouse nominations and main residence elections
Couples can have only one main residence between them at any time for PRR purposes. If you own two properties (eg. a main home and a holiday cottage), you can nominate which is to be treated as your main residence with HMRC. The nomination must be made within two years of acquiring the second property, and can be varied. Strategic nomination is sometimes used to capture PRR on a property that’s about to be sold.
The 18-month “flipping” tactic that used to be possible was sharply curtailed when the final-period exemption was reduced from 36 months to 18 months in 2014, then to 9 months in 2020. The room for elective planning is now narrow.
Inherited property: cost basis and the date of death
If you inherit a property, your CGT cost basis is the market value at the date of death of the previous owner, not the price they paid. So a property inherited at £400,000 valuation and sold a year later for £450,000 produces a gain of £50,000 — not the much larger gain that would arise from the original purchase price.
If the estate paid Inheritance Tax on the property, the IHT valuation is normally the same as the CGT base cost. Probate valuations matter here: a low probate value saves IHT but creates more CGT later, and vice versa. Couples often want professional advice on this trade-off when administering a substantial estate.
Key takeaways
- CGT on residential property is 18% in the basic-rate band and 24% above for 2026/27, aligned with non-property rates.
- Reporting and payment is within 60 days of completion via HMRC’s CGT on UK property service.
- Private Residence Relief exempts the proportion of the gain relating to actual occupation, plus the final 9 months and certain allowed absences.
- Lettings Relief is severely restricted since 2020 and only applies where the owner shared occupation with the tenant.
- Inherited property has a cost basis at the date of death valuation, not the original purchase price.
Frequently asked questions
What counts as my main residence for PRR? Where you actually live as your home — not where you have a postal address or pay council tax. For most people this is straightforward; for someone with two homes it’s a question of fact and degree, looking at where the family lives, where children go to school, where you keep your possessions and how often you actually stay in each.
Does Lettings Relief apply to my buy-to-let? Probably not. Since 6 April 2020, Lettings Relief only applies where you and the tenant lived in the property at the same time. A standalone buy-to-let where the landlord doesn’t live in the property doesn’t qualify. The relief now mostly catches lodger-style arrangements.
Can I avoid the 60-day rule? No. If CGT is due on a UK residential property disposal, the 60-day return and payment is mandatory. Penalties and interest apply for missing the deadline. The only way to avoid the report is to have no CGT to pay — typically because PRR fully covers the gain or the gain is below the annual exempt amount.
What if my gain is below the £3,000 annual exempt amount? You don’t have to file a 60-day return because no CGT is due. The disposal still goes on your Self Assessment return for that year if you’re required to file one.