Published 3 October 2026. Rules and rates from HMRC guidance on GOV.UK, checked 3 October 2026. Covers individual landlords in England. General information, not tax advice; take advice on your own position.

Capital Gains Tax for Landlords: Rates, Allowance, Deductions and the 60-Day Rule

When you sell a buy-to-let at a profit you pay capital gains tax on the gain above the £3,000 annual allowance, at 18 percent on the part that falls within your basic rate band and 24 percent above it. For a UK residential property you must report the sale and pay the tax within 60 days of completion, not at the end of the tax year. This guide sets out the 2026 to 2027 rates, what reduces the gain, how private residence relief works for a home you once lived in, and a worked example.

Rates and allowance for 2026 to 2027

GOV.UK, Capital Gains Tax: what you pay it on, rates and allowances, checked 3 October 2026.

The 18 and 24 percent rates now apply to all gains, not just property. Each joint owner has their own £3,000 allowance and their own basic rate band, which is why a property owned jointly with a spouse who pays basic rate often produces a lower bill than one owned by a higher rate taxpayer alone.

Working out the gain

The gain is the sale price less the purchase price and the allowable costs of buying, improving and selling:

• Buying: stamp duty (including the surcharge, see the stamp duty guide), solicitor and survey fees.
• Improving: capital work still reflected in the property at sale, such as an extension, a loft conversion or insulation added where there was none. These are the costs you could not deduct from rent; see the expenses guide.
• Selling: estate agent and solicitor fees.

Repairs already deducted from rental income cannot be deducted again. Mortgage interest is never part of the gain calculation. Losses on other disposals in the same year are set against the gain, and losses brought forward from earlier years can reduce it to the annual allowance.

The 60-day report and pay rule

A UK resident who sells a UK residential property with tax to pay must report it using HMRC's Capital Gains Tax on UK property service and pay an estimate of the tax within 60 days of completion. The date that counts is completion, not exchange of contracts. You still include the gain on your Self Assessment return for the year, or in your Making Tax Digital return once you are in it, where the final figure is settled and any difference paid or refunded. Late reporting and late payment both attract penalties and interest. Put the deadline in the compliance calendar the day you exchange.

The 60 days are tight if you need valuations, so gather the purchase completion statement, improvement invoices and sale costs before completion.

If you once lived in the property

Private residence relief removes the gain for the period a property was your only or main home, plus the final nine months of ownership whether or not you lived there then. A flat you lived in for four years and then let for six is broadly 4.75 years out of 10 exempt. Lettings relief, which used to add up to £40,000, has since 6 April 2020 applied only where you shared occupancy with your tenant, for example a lodger in your own home.

Worked example

A higher rate landlord sells a buy-to-let terrace in 2026 to 2027 that they never lived in.

Illustrative figures. A basic rate taxpayer would pay 18% on the part of the gain within their unused basic rate band.

The £15,048 is due within 60 days of completion. If the property had been owned jointly with a spouse who has £20,000 of unused basic rate band, their half would be partly taxed at 18 percent and each would use a £3,000 allowance, cutting the bill by roughly £2,000. The rental yield calculator shows running returns; this is the cost at the exit.

Points to check before selling

• Timing across tax years. Completing after 5 April puts the gain in the next year, with a fresh allowance.
• Spouse transfers. Transfers between spouses and civil partners living together are at no gain, no loss, but must be genuine.
• Tenants in place. Since 1 May 2026, if a tenant will not leave voluntarily, selling with vacant possession needs ground 1A and four months' notice, not in the first 12 months of a tenancy; see the possession grounds guide.
• Licences and the database. A buyer applies for a new licence; licences do not transfer. Close your entry on the landlord database when the sale completes.

Frequently asked questions

What is the capital gains tax rate on a buy-to-let?

18 percent on the part of the gain within your unused basic rate band and 24 percent above it, for 2026 to 2027. Higher and additional rate taxpayers pay 24 percent on the whole gain.

What is the capital gains tax allowance for 2026 to 2027?

£3,000 per individual. Joint owners each have their own allowance. Unused allowance cannot be carried forward.

When do I pay capital gains tax on a rental property?

Within 60 days of completion, through HMRC's Capital Gains Tax on UK property service, if there is tax to pay. The gain also goes on your tax return for the year.

What can I deduct from the gain?

The costs of buying (stamp duty, legal and survey fees), capital improvements still reflected in the property, and the costs of selling. Repairs already set against rental income cannot be deducted again.

Do I pay capital gains tax on a home I used to live in?

Only on the let period after relief. Private residence relief covers the time it was your main home plus the final nine months. Lettings relief now only applies if you shared the home with your tenant.

Sources

GOV.UK: Capital Gains Tax rates and allowances; Report and pay your Capital Gains Tax; Tax when you sell property; HS283 Private Residence Relief. Checked 3 October 2026. See the methodology.