Your sale price, purchase costs, years owned, and Private Residence Relief. Calculate your CGT bill on selling a residential property under 2026/27 rules — 18% or 24%, with the 60-day reporting deadline front and centre.
When you sell a residential property for a gain, you're liable for Capital Gains Tax — unless it qualifies for Private Residence Relief (PRR). Your main residence — the property where you live as your primary home — is completely exempt from CGT for the entire period you owned it as your main home, plus an extra nine months at the end, regardless of whether you lived there. This is a powerful relief: many property sales incur zero tax because of PRR, even though the property has gained substantially in value.
PRR is calculated as a simple fraction: the number of months you lived in the property as your main home, plus nine months at the end, divided by the total number of months you owned it. If you owned a property for 20 years (240 months) and lived in it for 15 years (180 months), PRR covers 189 months (180 + final 9). That's 189/240 = 78.75% of your gain tax-free. The remaining 21.25% — your gain on the period you let it out or left it empty — is taxable.
Letting Relief was sharply curtailed in April 2020. Today it's available only if you lived in the property at the same time as a tenant — meaning you shared occupation (flat-mate, lodger, or similar) rather than simply renting the whole thing out. The relief is limited to £40,000. If you were a buy-to-let landlord from day one, or if you moved out entirely before letting, you don't qualify. Check carefully whether your property qualifies before relying on this relief.
Most capital gains (shares, bonds, investment funds) are taxed at 10% (basic rate) or 20% (higher rate). Residential property is taxed at 18% (basic rate) or 24% (higher rate) — double. The government did this intentionally: to dampen buy-to-let investment and favour owner-occupiers (who get PRR). The higher rate applies once your total taxable income (salary + self-employment + gains) pushes you into the higher income tax band (over £50,270 in 2026/27).
| Item | Amount |
|---|---|
| Sale price | £0 |
| Less: purchase price | £0 |
| Less: purchase costs (SDLT, legal, survey) | £0 |
| Less: capital improvements | £0 |
| Less: selling costs (legal, agent) | £0 |
| Gross gain | £0 |
| Less: Private Residence Relief (PRR) | £0 |
| Less: Letting Relief (if applicable) | £0 |
| Gain after reliefs | £0 |
| Annual Exempt Amount (AEA) — £3,000 per person | £0 |
| Taxable gain | £0 |
| Tax at 18% (basic rate) | £0 |
| Net proceeds (sale price less CGT) | £0 |
Residential property gains must be reported to HMRC and CGT must be paid within 60 days of completion of sale. Missing this deadline triggers a £100 penalty immediately, then £10 per day after three months. Even if you made no gain, or are a non-UK resident, you must still file within 60 days. Many landlords don't know about this rule and incur substantial penalties. Mark your calendar: 60 days from exchange of contracts is your deadline.
If you're selling jointly with your spouse, the gain can be split between you. Each person gets a separate £3,000 Annual Exempt Amount — so you can jointly shelter £6,000 of gain tax-free instead of £3,000. More importantly, if one spouse has unused basic-rate band, you can load more gain onto them at 18% instead of 24%. This is automatic if you've held the property as joint owners. If you owned it individually, a no-gain-no-loss transfer to your spouse before sale — allowed under spousal relief — lets you then sell jointly and split the gain.
Capital improvements (allowed deduction): A new extension, loft conversion, fitted kitchen, new bathroom, double glazing, or central heating. These add to the property's value and are deductible from your gain. Repairs (NOT allowed): Fixing a leaky roof, redecorating, replacing broken windows, repainting. These maintain the property but don't materially enhance its value and are not deductible. The dividing line can be blurry — when in doubt, consult a tax specialist.
If you claim £50,000 in capital improvements, HMRC can challenge you. Keep all invoices, receipts, architect's drawings, and building regulation certificates. Improvements made more than a year before sale are easier to substantiate; last-minute work raises eyebrows. A surveyor's report documenting the property's condition before and after improvements can be helpful too.
This calculator illustrates the core mechanism of CGT on residential property sales but omits many edge cases, reliefs, and special rules. Your circumstances may differ: non-resident status, overseas property, joint ownership complexities, trust interests, or partial business use can all affect your liability. Always consult a qualified tax adviser or accountant before a major sale. HMRC guidance is available at gov.uk/capital-gains-tax.
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