United Kingdom
How much capital gains tax will I pay when I sell a property in the UK?
Capital gains tax on a UK residential property is 18% on the part of the gain that fits inside your unused basic-rate band and 24% on the rest, charged after the £3,000 annual exempt amount and any Private Residence Relief. On a £100,000 gain, a higher-rate taxpayer pays £23,280 and a basic-rate taxpayer on a £30,000 salary pays £22,818. It must be reported and paid within 60 days of completion.
| Annual exempt amount | £3,000 per person |
| Rate inside the basic-rate band | 18% |
| Rate above it | 24% |
| Higher-rate threshold | £50,270 |
| Reporting deadline | 60 days from completion |
| Tax on a £100,000 gain, higher-rate taxpayer | £23,280 |
What exactly is taxed when I sell a property?
The tax is charged on the gain, not on the sale price. That is the single most common misunderstanding, and it matters: selling a house for £400,000 does not mean paying tax on £400,000.
The gain is what you sold the property for, minus what you paid for it, minus the allowable costs of buying and selling, minus the cost of any capital improvements. If the property was your only or main home for some or all of the time you owned it, Private Residence Relief removes the share of the gain covering that period. Whatever survives all of that is the chargeable gain.
From the chargeable gain you deduct the annual exempt amount, £3,000 per person for 2026/27. Only what is left after that is actually taxed.
How much will I actually pay?
That depends on two things: the size of the gain, and your other income in the same tax year. Income matters because the gain is stacked on top of it to decide which rate applies. The part of the gain that fits inside your unused basic-rate band is taxed at 18%, and everything above at 24%.
The table below gives the actual tax at each combination. Every figure is produced by the same calculation as the site's calculator, which reproduces HM Revenue and Customs' own worked example exactly.
| Gain | No other income | £30,000 salary | £50,270 salary | £80,000 salary |
|---|---|---|---|---|
| £20,000 | £3,060 | £3,618 | £4,080 | £4,080 |
| £50,000 | £9,018 | £10,818 | £11,280 | £11,280 |
| £100,000 | £21,018 | £22,818 | £23,280 | £23,280 |
| £150,000 | £33,018 | £34,818 | £35,280 | £35,280 |
| £250,000 | £57,018 | £58,818 | £59,280 | £59,280 |
Estimated capital gains tax on a second home or rental in 2026/27, single owner, no reliefs. Figures assume the property was never your main residence.
Two patterns are worth noticing. First, someone with no other income pays substantially less on a small gain, because the whole basic-rate band is available. Second, that advantage disappears quickly: once the gain itself pushes you past £50,270 of combined income, the rest is taxed at the higher rate regardless of what you earn.
What can I deduct from the gain?
Allowable costs reduce the gain pound for pound, so they are worth collecting properly before you file. What counts:
- Estate agent and solicitor fees on both the purchase and the sale.
- Stamp Duty Land Tax you paid when you bought the property.
- Survey and valuation fees connected to buying or selling.
- Capital improvements: an extension, a loft conversion, a new kitchen where none existed, anything that added to the value and is still reflected in the property.
What does not count is just as important, because claiming it wrongly is a common error:
- Mortgage interest. Not allowable against a capital gain, even on a rental.
- Repairs and maintenance. Redecorating, replacing a boiler like for like, fixing a roof. These maintain value rather than add to it.
- Anything already claimed against rental income. A cost cannot reduce your income tax and your capital gains tax.
Do I pay anything if it was my home?
Usually not. Private Residence Relief exempts the gain for the period a property was your only or main residence, plus the final 9 months of ownership whatever happened in them. Live in a house for the whole time you own it and the sale is normally free of capital gains tax entirely.
Partial relief is where the money is. The exempt fraction is the months it was your main home plus the final 9, divided by the total months you owned it. So a property owned for ten years and lived in for six gets 68 per cent of the gain relieved, not sixty.
| Step | Amount |
|---|---|
| Sale price | £500,000 |
| Less purchase price | −£300,000 |
| Gain | £200,000 |
| Less Private Residence Relief, 81 of 120 months | −£135,000 |
| Chargeable gain | £65,000 |
| Less annual exempt amount | −£3,000 |
| Taxable gain | £62,000 |
| Estimated tax, higher-rate taxpayer | £14,880 |
A property owned ten years, lived in for six, sold by a higher-rate taxpayer. The final 9 months count as occupation on top of the six years.
Does owning it jointly reduce the tax?
Yes, and often by more than people expect. The annual exempt amount is per person, so a couple who own a property jointly have £6,000 between them rather than £3,000. Each owner also has their own basic-rate band, so half the gain is measured against each person's income rather than all of it against one.
On the same £100,000 gain used above, a single higher-rate owner pays £23,280. The same gain split between two owners, both higher-rate, comes to £22,560. If one of them has little or no income, the saving is larger again, because more of their half falls in the basic-rate band.
When do I have to report and pay?
Within 60 days of completion, through an HM Revenue and Customs Capital Gains Tax on UK property account. This is separate from Self Assessment and catches people out constantly, because the money is due long before the tax return that also reports it.
If the sale is fully covered by Private Residence Relief or falls inside the annual exempt amount, a UK resident usually does not need to file the 60-day return. Non-residents must report every disposal of UK property whether or not any tax is due.
Late filing attracts a fixed penalty, then further penalties and interest. The practical advice is to set the money aside at completion rather than after, because the window is short and the amount is usually known on the day.
What do people get wrong most often?
- Thinking the tax applies to the sale price. It applies to the gain.
- Forgetting the purchase costs. Stamp duty and legal fees from years ago still reduce the gain, and the paperwork is often findable.
- Claiming repairs as improvements. Replacing something like for like is maintenance and is not allowable.
- Missing the 60-day deadline because they were waiting for the tax return.
- Assuming a former home is fully exempt. It is exempt only for the period it was your main residence plus the final 9 months.
- Ignoring an unused allowance in a couple. Two allowances and two basic-rate bands are worth real money.
Work out your own figure with the UK calculator
Common questions
How much capital gains tax will I pay on a £100,000 gain?
A higher-rate taxpayer pays an estimated £23,280, being £97,000 taxable at 24% after the £3,000 allowance. A basic-rate taxpayer earning £30,000 pays about £22,818, because part of the gain falls in their remaining basic-rate band at 18%.
Do I pay capital gains tax when I sell my only home?
Usually not. Private Residence Relief exempts the gain for the period the property was your only or main residence, plus the final 9 months of ownership. If you lived there for the whole time you owned it, the sale is normally free of capital gains tax.
What is the capital gains tax allowance for 2026 to 2027?
£3,000 per person. A couple who own a property jointly can use £6,000 between them. The allowance cannot be carried forward, so an unused one is lost at the end of the tax year.
Can I deduct mortgage interest from a capital gain?
No. Mortgage interest is not an allowable cost for capital gains tax, even on a rental property. Only capital costs reduce the gain: buying and selling fees, stamp duty paid on purchase, and improvements that added value.
How long do I have to pay capital gains tax on a UK property?
60 days from completion, reported and paid through an HM Revenue and Customs Capital Gains Tax on UK property account. This is separate from Self Assessment, and missing it can trigger penalties and interest.
Is capital gains tax charged on the sale price or the profit?
On the profit. The gain is the sale price minus the purchase price, minus allowable buying and selling costs, minus capital improvements. Reliefs and the annual exempt amount are then deducted before any tax is worked out.
This is an estimate for general information only, not tax, legal or financial advice. Tax rules are complex and depend on your circumstances, and figures may not reflect the latest changes. Confirm your position with HM Revenue & Customs (gov.uk) or a qualified tax adviser before acting. The terms of use set out the limits of this estimate and of our liability.
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