This content is for educational purposes only and does not constitute Tax or financial advice. Tax rules can change, and individual circumstances vary. Always refer to official HMRC guidance or seek professional support where needed.
Capital gains tax on property in the UK can apply when you sell a home that is not fully covered by reliefs, such as a buy-to-let, second home, or inherited property.
This guide explains how Capital Gains Tax on property works in the UK for the 2025/26 tax year, who it applies to, what costs and reliefs may be relevant, and where professional support is especially important.
👉 If you haven’t estimated your gain yet, start with my free Capital Gains Tax calculator here
(Tip: keep that page open – this article builds on it.)
Property CGT Pre-Sale Checklist
Your Complete Guide to Preparing for a Property Sale in the UK
2025/26 Tax Year
KIAS CONSULTING PRO
Before you sell property in the UK, proper preparation can help you:
- Understand whether Capital Gains Tax (CGT) applies
- Gather all necessary documentation
- Identify allowable costs that reduce your tax bill
- Meet critical reporting deadlines
- Know when to seek professional advice
This checklist is designed to help you organize your information and identify important considerations before, during, and after your property sale.
⚠️ Important: This is an educational checklist only. It does not constitute tax, financial, or legal advice. Tax rules are complex and individual circumstances vary. Always consult HMRC guidance and consider professional support from a qualified accountant or Chartered Tax Adviser for your specific situation.
🗓️ Critical Dates to Know (2025/26)
📋 PHASE 1: Before You List the Property
1.1 Determine If CGT Applies
- Main residence check: Was this property your only or main home during ownership?
- Private Residence Relief (PRR): Did you live in the property as your main home for the entire ownership period?
- Absences: Were there any periods when you didn't live in the property?
- Letting out: Did you ever rent out all or part of the property?
- Multiple properties: Do/did you own more than one property at any time?
- Business use: Was any part of the property used exclusively for business?
✅ Full PRR Exemption May Apply If:
• The property was your only home throughout ownership
• You lived in it as your main residence
• The grounds are less than 0.5 hectares (about 1.25 acres)
• No part was used exclusively for business
• The final 9 months of ownership always qualify (if it was ever your main home)
1.2 Property Details & Timeline
- Purchase date: Record exact completion date
- Original purchase price: Get final completion statement
- Inheritance details: If inherited, obtain probate valuation and date
- Ownership changes: Note any changes in ownership structure
- Residence timeline: Create timeline showing when you lived there vs periods of absence/letting
1.3 Gather Purchase Documentation
- Purchase contract: Original sale and purchase agreement
- Completion statement: Shows actual price paid
- Solicitor's bill: Legal fees from purchase
- Stamp Duty receipt: SDLT payment confirmation
- Survey/valuation fees: Any costs incurred for purchase
- Probate documents: If inherited (valuation at death, grant of probate)
💰 PHASE 2: Identify Allowable Costs
What Are Allowable Costs?
Costs that can be deducted from your gain to reduce CGT. These must be directly related to acquiring, improving, or disposing of the property.
2.1 Acquisition Costs (When You Bought)
- Solicitor/conveyancer fees for the purchase
- Stamp Duty Land Tax (SDLT) paid on purchase
- Survey and valuation fees required for purchase
- Land Registry fees for registration
2.2 Improvement Costs (Capital Improvements Only)
- Extensions: Additional rooms, conservatory, loft conversion
- New installations: First-time kitchen/bathroom installation, central heating
- Structural work: New roof structure (not repairs), underpinning, damp-proofing
- Conversions: Garage conversion, basement conversion
- Planning permission costs: For qualifying improvements
⚠️ NOT Allowable:
• Routine repairs and maintenance
• Redecoration (painting, wallpaper)
• Like-for-like replacements (new boiler same type)
• Mortgage interest or arrangement fees
• Insurance premiums
• Council tax, utility bills, service charges
2.3 Disposal Costs (When You Sell)
- Estate agent fees and commission
- Solicitor/conveyancer fees for the sale
- Energy Performance Certificate (EPC) cost
- Advertising costs if not included in agent fees
- Valuation fees for the sale
2.4 Document Everything
- Collect all invoices: Original receipts for all improvement work
- Planning permissions: Copies of approved applications
- Building regulations: Completion certificates for major work
- Before/after photos: Evidence of improvements made
- Contractor quotes: Supporting documentation for work done
🧮 PHASE 3: Calculate Your Potential CGT
| Step | Description | Your Figure |
|---|---|---|
| 1 | Expected sale price | £ _______________ |
| 2 | Less: Purchase price (or probate value) | £ _______________ |
| 3 | Less: Allowable acquisition costs | £ _______________ |
| 4 | Less: Allowable improvement costs | £ _______________ |
| 5 | Less: Allowable disposal costs | £ _______________ |
| 6 | Total Gain (before allowance) | £ _______________ |
| 7 | Less: Annual CGT allowance (£3,000) | £ _______________ |
| 8 | Less: Capital losses (if available) | £ _______________ |
| 9 | Taxable Gain | £ _______________ |
| 10 | Estimated CGT (18% or 24%) | £ _______________ |
💡 Use the Online Calculator
For a more accurate estimate, use the free CGT calculator at:
kiasconsultingpro.com/capital-gains-tax-uk/
3.1 Tax Planning Considerations
- Timing: Consider selling before/after 5 April if near tax year boundary
- Spouse transfer: Could transferring ownership share reduce overall CGT? (must transfer before sale)
- Multiple properties: Sell one per year to use multiple annual allowances
- Capital losses: Check if losses from other assets can offset this gain
- Income planning: Will your income be lower in a future year (affecting CGT rate)?
📝 PHASE 4: During the Sale Process
4.1 Keep Records of All Costs
- Estate agent invoice: Confirmation of fees and commission
- Solicitor's final bill: Breakdown of all legal costs
- EPC certificate: Receipt for Energy Performance Certificate
- Any other costs: Marketing, photography, etc.
4.2 Note the Completion Date
- Completion date: Record exact date (starts 60-day clock for property CGT)
- Completion statement: Get copy showing final sale price
- Calculate deadline: 60 days from completion = reporting deadline
- Set reminder: Mark deadline in calendar with 1-week advance warning
⚠️ PHASE 5: After Completion (CRITICAL DEADLINES)
🚨 60-DAY PROPERTY REPORTING RULE
If CGT is due on a UK residential property sale, you must:
1. Report the gain to HMRC
2. Pay the CGT owed
Within 60 days of completion
This is separate from your Self Assessment tax return.
5.1 Within 60 Days of Completion
- Calculate final CGT: Use actual figures (not estimates)
- Determine if reporting required: Check HMRC rules (may be required even if no tax due)
- Create Government Gateway account: If you don't have one
- Report via HMRC service: Use "Report and pay Capital Gains Tax on UK property"
- Pay CGT due: Payment must reach HMRC within 60 days
- Keep confirmation: Save submission receipt and payment reference
5.2 By 31 January Following Tax Year
- Self Assessment return: Include property disposal details (even if already reported)
- Reconcile payment: Confirm 60-day payment is credited
- Pay any additional tax: If final calculation differs from 60-day report
5.3 Record Keeping (Keep for 6 Years)
- All purchase documents: Original contracts, completion statements
- All sale documents: Final contracts, completion statements
- All receipts: Improvement costs, disposal costs, acquisition costs
- HMRC correspondence: Submission confirmations, payment receipts
- Evidence of residence: Council tax bills, utility bills showing occupancy
- CGT calculations: Your working and supporting documents
🤝 When to Seek Professional Support
Professional Advice is Strongly Recommended If:
✅ The expected gain is large (£50,000+)
✅ You've owned multiple properties during ownership
✅ The property was inherited
✅ You lived abroad for part of the ownership period
✅ The property was partially let out
✅ Part was used for business
✅ There's been a divorce or separation
✅ The property is held in trust
✅ Ownership structure is complex
✅ You're unsure about Private Residence Relief
✅ You're not UK tax resident
Types of Professional Support:
| Professional | What They Can Help With |
|---|---|
| Chartered Tax Adviser | Tax-specific calculations, reliefs, complex scenarios, HMRC compliance |
| Accountant | Tax returns, record keeping, CGT calculations, HMRC reporting |
| Solicitor | Legal aspects of property transactions, ownership structures, trusts |
| Financial Coach | Understanding concepts, organizing information, broader financial planning |
📞 How Kias Consulting Pro Can Help
As financial coaches, we don't provide tax advice, but we can help you:
• Understand CGT concepts in plain English
• Organize your financial information before meeting professionals
• Identify the right questions to ask your accountant or tax adviser
• Ensure property decisions align with your broader financial goals
Book a free financial coaching call at: kiasconsultingpro.com
📝 Your Notes & Key Dates
📌 Quick Reference Summary
| Item | 2025/26 Figure |
|---|---|
| Annual CGT Allowance | £3,000 per person |
| CGT Rate - Basic Rate Taxpayer | 18% |
| CGT Rate - Higher/Additional Rate | 24% |
| Property Reporting Deadline | 60 days from completion |
| Tax Year Ends | 5 April 2026 |
| Self Assessment Deadline | 31 January 2027 |
| Final Period Exemption (PRR) | Final 9 months (if ever main home) |
| Permitted Area (PRR) | Usually up to 0.5 hectares |
When Does Capital Gains Tax on Property Apply in the UK?
Capital Gains Tax is charged on the profit (gain) you make when you dispose of a property that isn’t fully exempt.
A disposal can include:
- selling a property
- gifting a property (to someone other than a spouse or civil partner)
- transferring ownership
- exchanging property for another asset
CGT is charged on the gain, not the sale price:
Gain = sale price – purchase price – allowable costs
Property CGT commonly applies to:
- buy-to-let properties
- second homes or holiday homes
- inherited property (on gains after inheritance)
- properties not used as your main residence
If you’re unsure whether your sale is taxable, the calculator can help you estimate it before you proceed.
When Property CGT May Not Apply
Not every property sale results in Capital Gains Tax.
The most common exemption is Private Residence Relief (PRR), which may apply to your main home. However, PRR is not automatic and depends on facts such as:
- how long you lived in the property
- whether it was ever let out
- whether you owned more than one property
- periods of absence or overseas residence
Because PRR is highly fact-specific, it’s important not to assume you’re exempt without checking.
Private Residence Relief and Capital Gains Tax on Property
Private Residence Relief (PRR) can reduce, or in some cases eliminate, Capital Gains Tax on the sale of your main home.
In simple terms, PRR may apply if:
- the property was genuinely your main residence, and
- it was occupied as your home during ownership
Automatic final period exemption
The final 9 months of ownership automatically qualify for PRR, even if you had already moved out, provided the property was your main residence at some point.
This final period exemption is one of the most valuable parts of PRR and is often overlooked.
Partial relief may apply if:
- you lived in the property for only part of the ownership period
- the property was let out at some point
- you moved out before selling
- you owned more than one property
Important:
PRR is highly fact-specific. Changes in use, periods of absence, overseas residence, or multiple properties can all affect how much relief applies. Professional support is often worthwhile where the history is complex.
Note for larger properties
PRR usually covers the home and its grounds up to 0.5 hectares (approximately 1.25 acres).
Larger grounds may only qualify if they are required for the reasonable enjoyment of the property. This can be subjective and is another area where professional advice is helpfu
Capital Gains Tax on Buy-to-Let and Second Homes
Buy-to-let properties and second homes are not automatically exempt from CGT.
Key points to understand:
- PRR usually does not apply unless the property was your main residence
- Lettings Relief is now very limited and only applies in specific situations
- CGT is calculated on the gain after allowable costs
Quick note on Lettings Relief (post-April 2020)
Since April 2020, Lettings Relief has been significantly restricted.
It now only applies if:
- you lived in the property at the same time as your tenant (shared occupation), and
- the property was your main residence at some point
Maximum relief:
- £40,000 per person
- £80,000 for jointly owned property
👉 This means most buy-to-let properties no longer qualify for Lettings Relief.
If you own multiple properties, CGT outcomes can vary significantly depending on:
- ownership structure
- use of each property
- timing of disposals
This is one area where assumptions often lead to unexpected tax bills.
Capital Gains Tax on Inherited Property
Inheriting property does not automatically trigger CGT.
Instead:
- the property’s value at probate becomes your “base cost”
- CGT applies only to gains made after inheritance, when you later sell
For example:
- Probate value: £300,000
- Sale price: £380,000
- Potential gain: £80,000 (before allowable costs and reliefs)
Inheritance Tax and Capital Gains Tax are separate taxes, and it’s common for people to confuse the two.
Allowable Costs for Property (Where Many People Overpay)
One of the most common reasons people overpay CGT on property is failing to include all allowable costs.
Examples of costs that may reduce your gain include:
- solicitor and legal fees (purchase and sale)
- estate agent fees
- Stamp Duty paid on purchase
- capital improvement costs (e.g. extensions, structural work, not routine repairs)
- certain valuation fees
Costs that are usually not allowable include:
- routine maintenance and repairs
- mortgage interest
- insurance
- council tax and utility bills
📊 Update your CGT estimate with all allowable costs included
Many people overpay simply by missing deductions.
👉 Recalculate your figures here
The 60-Day Capital Gains Tax on Property Reporting Rule
If you sell UK residential property and CGT is due, you usually must:
- report the gain, and
- pay the CGT owed
within 60 days of completion.
Non-UK residents
If you are a non-UK resident and sell a UK residential property:
- the 60-day reporting and payment rule still applies, and
- reliefs such as PRR may only apply to periods where specific residency and day-count tests are met
Non-resident property CGT is a specialist area, and professional advice is strongly recommended.
Missing this deadline can lead to:
- late filing penalties
- interest on unpaid tax
The rule itself is strict, but the 60-day window is your opportunity to:
- gather documentation
- confirm acquisition values
- identify allowable costs
- seek professional support if needed
⏰ This deadline is strict and non-negotiable.
HMRC does not usually accept “I didn’t know” as a valid excuse for late reporting.
Leaving this until the last minute is one of the most common (and costly) mistakes property sellers make.
Using Capital Losses to Offset Property Gains
Capital losses from other assets (such as shares or funds) may be used to reduce property gains, subject to HMRC rules.
In general:
- losses can offset gains in the same tax year
- unused losses can often be carried forward to future years
- losses usually need to be reported to HMRC to be usable
This is covered in more detail in my guide on reducing CGT more broadly, which looks at losses alongside other planning concepts:
👉 Read next: How to Reduce Capital Gains Tax Legally in the UK
Common Property CGT Mistakes to Avoid
Property sellers frequently run into problems by:
- assuming their home is automatically CGT-free
- missing the 60-day reporting deadline
- forgetting allowable costs
- misunderstanding ownership (especially for couples)
- confusing income tax rules with CGT rules
A little preparation can often prevent expensive errors.
When Professional Support Is Strongly Recommended
While this guide is educational, professional advice is often appropriate if:
- the gain is large (e.g. £50,000+ or £100,000+)
- multiple properties are involved
- the property was inherited
- ownership or residence history is complex
- you’ve lived abroad
- trusts, divorce, or business ownership are involved
A qualified accountant or Chartered Tax Adviser can provide tax-specific advice and compliance support.
Where Financial Coaching Can Help
As a personal finance coach, my role is not to give tax advice.
What I can help with is:
- explaining CGT concepts in plain English
- helping you organise your numbers before meeting a professional
- identifying the right questions to ask your accountant or tax adviser
- making sure property decisions align with your wider financial goals
Capital Gains Tax on Property: Planning Checklist
Before you sell:
- Check whether the disposal is taxable (reliefs may apply)
- Gather purchase and sale documents
- List potential allowable costs and keep evidence
- Estimate your gain using a CGT calculator
- Check whether capital losses are available
- Confirm legal ownership (especially for couples)
If property is involved:
- Confirm whether the 60-day reporting rule applies
- Don’t leave reporting or calculations until the last minute
Looking ahead:
- Review how much investing sits outside ISAs and pensions
- Consider building tax-efficient investing habits before gains build up
Q: Do I pay Capital Gains Tax when selling my house in the UK?
It depends. If the property qualifies fully for Private Residence Relief, CGT may not apply. Other properties are often taxable.
Q: What is the 60-day CGT property rule?
If CGT is due on a UK residential property sale, you usually must report and pay it within 60 days of completion.
Q: Do I pay CGT on inherited property?
CGT applies only to gains made after you inherit the property, not to the value at inheritance.
Q: Can renovation costs reduce my CGT bill?
Some improvement costs may be allowable. Routine maintenance usually isn’t.
Q: Should I get professional advice for property CGT?
If the situation is complex or the gain is significant, professional advice is often worthwhile.
Understanding capital gains tax on property in the UK early can help you avoid missed reliefs, reporting penalties, and unnecessary stress later.
- Property CGT is common and often misunderstood
- The 60-day reporting rule is critical
- Allowable costs and reliefs can make a big difference
- Assumptions are risky; facts matter
- Education first, calculator second, professional advice where needed
Selling property and want help organising your next steps?
If you’re preparing to sell property and want support:
- organising your numbers
- understanding how CGT fits into your wider financial picture
- preparing questions for your accountant or tax adviser
Final disclaimer:
This content is for educational purposes only and does not constitute tax, financial, or legal advice. Always check HMRC guidance and seek professional support where appropriate.
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