Published: June 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations and tax rules have been audited against official UK legislation.
When selling a residential property in the UK that is not your main home, you are liable to pay Capital Gains Tax (CGT) on any profit you make. Following recent legislative updates, CGT rates and reporting deadlines have been tightened. In this guide, we walk you through the current CGT rates, allowances, deductible expenses, and the strict HMRC reporting rules for the 2026/27 tax year.
CGT Rates and Allowances for Property
For the 2026/27 tax year, the annual tax-free Capital Gains Allowance (also known as the Annual Exempt Amount) is **£3,000** per individual. Any gains exceeding this allowance on residential property are taxed according to your tax band:
- Basic Rate Taxpayers: Charged at **18%** on gains that fall within the basic rate band (£37,700 above the personal allowance).
- Higher and Additional Rate Taxpayers: Charged at **24%** on all gains that fall into the higher or additional rate bands.
Note: These rates apply specifically to residential property gains. Non-residential property and other assets (like shares) have different rates.
Deducting Expenses: What Can You Claim?
You only pay CGT on your net gain (profit), not the total sale price. You can reduce your taxable gain by deducting legitimate costs associated with acquiring, improving, and selling the property:
| Allowable Deductions | Non-Allowable Expenses |
|---|---|
| Purchase costs (solicitor fees, estate agent, SDLT) | Mortgage interest payments and loan fees |
| Capital improvements (extensions, structural alterations) | General maintenance (painting, repairs, servicing) |
| Sale costs (advertising, solicitor fees, estate agent commission) | Council tax and utility bills paid during ownership |
| Surveyors’ and valuation fees | Insurance premiums |
The 60-Day Payment and Reporting Deadline
Under HMRC rules, you must report and pay CGT on the disposal of UK residential property within **60 days of completion**. You must submit this using a standalone “Capital Gains Tax on UK property” account online. Failing to report and pay within the 60-day window results in immediate interest charges and late-filing penalties. You do not wait until your annual Self Assessment return to report these gains.
To accurately calculate your potential capital gains liability, factor in ownership splits, and calculate your net profit, use our Capital Gains Tax Property Calculator.
Frequently Asked Questions (FAQ)
Q: What is Private Residence Relief (PRR)?
A: PRR is a tax relief that exempts you from paying CGT when you sell your main home. If you lived in the property as your primary residence for the entire duration of ownership, your gain is completely tax-free. If you rented it out for a period, you only pay CGT on the proportion of time it was rented.
Q: Can married couples double their CGT allowance?
A: Yes. Married couples and civil partners can transfer assets between themselves tax-free. If you own a property jointly, you can combine your personal CGT allowances to claim a total tax-free gain of **£6,000** for the 2026/27 tax year.
Q: Can I offset property losses against property gains?
A: Yes. If you sell a residential property at a loss, you can report this loss to HMRC and offset it against gains made on other properties or assets in the same tax year, or carry the loss forward indefinitely to offset future gains.
Q: Does Corporation Tax apply to capital gains inside a company?
A: Yes. If a limited company sells a property, the gain is treated as business profit and is subject to Corporation Tax (19% to 25%) rather than personal CGT rates. Companies do not receive the £3,000 personal CGT allowance.
Q: Do non-residents have to pay CGT on UK property?
A: Yes. Non-UK residents are subject to CGT on all UK residential property sales. The gain is usually calculated based on the increase in value since April 2015 rather than the original purchase date.