Capital Gains Tax when selling a UK house — the complete guide for 2026/27

Do I pay Capital Gains Tax when I sell my house?

Capital Gains Tax (CGT) is charged on the gain you make, not the price you sell for. If the property has been your only or main home for the whole time you owned it, Private Residence Relief normally covers the entire gain and there is nothing to pay and nothing to report.

You are likely to have tax to pay if the property was a buy-to-let, a second home, a holiday home, a property you inherited and did not live in, or a home you let out for part of your ownership.

What are the Capital Gains Tax rates on residential property in 2026/27?

Residential property has its own CGT rates, higher than the rates for other assets. Which one you pay depends on where the gain sits when it is stacked on top of your income for the year — so a single sale can be taxed partly at 18% and partly at 24%.

How does Private Residence Relief work?

Private Residence Relief (PPR) removes the part of the gain that relates to the period the property was your only or main home. It is worked out in months: months of qualifying occupation divided by total months of ownership.

The final 9 months of ownership always qualify if the property was your main home at some point — so you are not penalised for a slow sale after you move out.

Can I still claim lettings relief?

Lettings relief still exists but since April 2020 it only applies where you shared occupation of the property with your tenant. It is capped at the lower of the PPR already given, the gain attributable to the letting, and £40,000.

If you moved out and let the whole property, lettings relief is not available — a change that catches out a lot of accidental landlords.

What costs can I deduct from the gain?

• Stamp Duty, LBTT or LTT paid when you bought
• Solicitors' and surveyors' fees on both the purchase and the sale
• Estate agent fees and marketing costs
• Capital improvements — an extension, a new kitchen where none existed, a loft conversion
• Costs of establishing or defending your title

Repairs and redecoration are not deductible against the gain — they are maintenance, not improvement. Anything you already claimed against rental income cannot be claimed again here.

When do I have to report and pay?

A UK residential property disposal with tax to pay must be reported and paid within 60 days of completion, through HMRC's 'Capital Gains Tax on UK property' service. The Self Assessment return later in the year does not replace that deadline.

How can I legally reduce the bill?

• Use both annual exempt amounts by transferring a share to a spouse or civil partner before exchange — transfers between spouses are on a no gain, no loss basis
• Claim every allowable cost, including the Stamp Duty you paid on purchase
• Offset capital losses from the same or earlier years
• Check whether any period of absence still counts as occupation, such as working abroad
• Consider the timing of completion where a gain would otherwise cross a tax year