United Kingdom guide
How capital gains tax on property works
Capital gains tax on UK property is charged on the profit you make when you sell, not the sale price. After Private Residence Relief and the £3,000 annual exempt amount, the gain is taxed at 18% within your remaining basic-rate band and 24% above it.
| Residential rates | 18% or 24% by band |
| Annual exempt amount | £3,000 |
| Main-home relief | Private Residence Relief |
| Report and pay | 60 days |
What is capital gains tax charged on?
Capital gains tax applies to the gain: the sale price minus the purchase price, minus allowable buying and selling costs, minus the cost of any capital improvements. A property that has always been your only home is normally free of tax through Private Residence Relief.
Which costs can I deduct?
You can deduct estate agent and solicitor fees, the Stamp Duty Land Tax you paid on purchase, survey and valuation fees, and the cost of improvements such as an extension. Ordinary repairs, maintenance and mortgage interest do not count.
Which rate applies to my gain?
The taxable gain is added on top of your income to decide the rate. The part that fits within your remaining basic-rate band (the band is £37,700 above the personal allowance) is taxed at 18%, and anything above is taxed at 24%.
Worked example, a second home
| Sale price | £300,000 |
| Purchase price | −£200,000 |
| Gain | £100,000 |
| Annual exempt amount | −£3,000 |
| Taxable gain | £97,000 |
| At 24% (higher-rate taxpayer) | £23,280 |
Figures assume the property was never your main home and your income already uses your basic-rate band.
Try your own figures in the United Kingdom capital gains tax on property calculator.
Common questions
Is capital gains tax charged on the whole sale price?
No. It is charged only on the gain, which is the sale price minus the purchase price and allowable costs.
Do I pay if I sell at a loss?
No tax is due on a loss. You can report the loss to set it against other gains in the same or later years.
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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