Capital gains tax when you sell a rental property

Capital gains tax when you sell a rental property

1. 1

   Work out the gain

   Sale price, minus what you paid, buying and selling costs (legal fees, stamp duty, agent) and improvements. Repairs and redecorating don't count.

2. 2

   Did you ever live there as your main home?

   YesPrivate residence relief covers the years you lived there, plus the final 9 months of ownership. Lettings relief only applies if you lived there with your tenant.

   NoThe whole gain is taxable.
3. 3

   Take off your allowance

   Each owner has a £3,000 annual exempt amount (2026/27). Joint owners each use their own. Losses on other property can reduce the gain.

4. 4

   Find your rate

   Residential property: 18% on the part of the gain that fits in your unused basic-rate band, 24% above it. The October 2026 Budget did not change these rates.

5. !

   Report and pay within 60 days

   UK residents: if there's tax to pay on a UK home, report it on HMRC's online service and pay within 60 days of completion — not exchange. Non-UK residents must report every UK property sale within 60 days even if no tax is due. Late reports get penalties and interest.

6. 5

   Include it on your tax return

   You still report the sale on your Self Assessment return for that year; the 60-day payment counts towards it.

7. ✓

   Keep the paperwork

   Keep completion statements and receipts for improvements. If the figures are large, have an accountant check before you complete.

Checked against official sources on 10 November 2026 · General information, not legal advice · landlordwala.com/diagrams/capital-gains-selling