What capital gains tax will you pay on the sale of your home?

This article provides guidance on how to calculate capital gains tax on UK residential property sales and points out the reliefs potentially available.

Principal Private Residence Relief (PPR)

The most important relief for homeowners is Principal Private Residence Relief (PPR). If a property has been your only or main residence throughout your entire period of ownership, any gain on disposal will be fully exempt from CGT.

Partial occupation

If you have not lived in the property for the entire period of ownership, you will receive PPR for the periods you occupied the property as your main residence, plus the final 9 months of ownership (regardless of whether you lived there during that time).

Letting Relief

If you have let out all or part of your main residence, you may be entitled to Letting Relief. Since April 2020, this relief is only available where the owner is in shared occupation with the tenant. The maximum relief is the lower of: the PPR relief amount, £40,000, or the gain attributable to the letting period.

UK residential property CGT rates (2026/27)

The Autumn Budget 2024 reduced the higher rate of CGT on residential property. The current rates are:

• Basic rate taxpayers: 18%
• Higher and additional rate taxpayers: 24% (reduced from 28% from 30 October 2024)

The CGT annual exempt amount is £3,000 for 2024/25 onwards — significantly reduced from £12,300 in 2022/23. This means a much smaller portion of any gain will be sheltered from tax, making the availability of reliefs such as PPR more important than ever.

Reporting requirements

Any CGT on UK residential property must be reported and paid within 60 days of completion of the sale. This applies even if you are within the annual exempt amount or expect no tax to be due. Failure to report within 60 days can result in penalties and interest charges.

How we can help

If you're selling a residential property and want to understand your CGT position, our Private Client Tax team can help you calculate your liability and identify any reliefs available to you. With the annual exempt amount at its lowest level in many years, taking advice before completion is strongly recommended.