How the gain and the tax are worked out
The gain is the sale price less the costs of selling, the purchase price, the costs of buying and the cost of any improvements. Your share of that gain, less any capital losses and the £3,000 annual exempt amount for 2026 to 2027, is the taxable gain. It is taxed as if it sat on top of your income: the part that fits into your unused basic rate band (£37,700 above your personal allowance) is taxed at 18 percent, and the rest at 24 percent.
The residential property rates have been 18 percent and 24 percent since 6 April 2024, when the higher rate came down from 28 percent. UK residents selling UK residential property with tax to pay must report the sale and pay the tax within 60 days of completion, using HMRC's online Capital Gains Tax on UK property account. If there is no tax to pay, for example because the gain is covered by the allowance or losses, you do not need to report within 60 days.
Worked example
| Line | Amount |
|---|
| Sale price | £285,000 |
| Less selling costs | -£4,500 |
| Less purchase price and buying costs | -£197,200 |
| Less improvements | -£12,000 |
| Gain | £71,300 |
| Less annual exempt amount | -£3,000 |
| Taxable gain | £68,300 |
| £12,270 of unused basic rate band at 18 percent | £2,209 |
| £56,030 at 24 percent | £13,447 |
| Capital gains tax | £15,656 |
Sole owner with £38,000 of taxable income before the personal allowance, so £25,430 of the £37,700 basic rate band is used and £12,270 is left.
The calculator does not cover private residence relief for a property you once lived in, gifts to a spouse or civil partner, inherited property valued at probate, or sales by a company, which pays corporation tax on gains instead. This page is general information for England and is not tax advice; if the sale is large or the history is complicated, use a qualified tax adviser.
Frequently asked questions
What is the capital gains tax rate on a buy-to-let property?
18 percent on the part of the gain that falls within your unused basic rate band and 24 percent on the rest, for disposals on or after 6 April 2024.
How long do I have to pay capital gains tax on a rental property?
60 days from the completion date. You report the sale and pay the tax through HMRC's Capital Gains Tax on UK property service, and if you file a Self Assessment return, the gain goes on that as well.
What is the capital gains tax allowance for 2026 to 2027?
£3,000 per person. Joint owners each have their own allowance, so a couple selling a jointly owned property can set £6,000 against the gain.
What costs can I deduct from the gain?
Buying costs such as stamp duty, legal fees and surveys, selling costs such as estate agent and legal fees, and capital improvements that are still reflected in the property. Repairs, mortgage interest and running costs are not deductible from the gain.
Do I need to report the sale if no tax is due?
Not within 60 days. If the gain is covered by your allowance or losses, there is nothing to report through the 60-day service, though you may still need to include the disposal on your Self Assessment return.
Sources
GOV.UK Capital Gains Tax rates and allowance, 2026 to 2027; GOV.UK on the residential rate from 6 April 2024; GOV.UK on reporting and paying within 60 days; GOV.UK income tax bands. All checked 3 October 2026.