Capital Gains Tax
Selling your rental property
When Does CGT Apply?
Capital Gains Tax (CGT) is payable when you sell a rental property for more than you paid for it (including allowable costs). As a landlord, you're liable for CGT on any gain made on properties that aren't your main residence.
Current Rates (2024/25)
For residential property, CGT rates are:
- 18% for gains within the basic rate band
- 24% for gains within the higher rate band
These rates are higher than for other assets and were changed in October 2024.
Calculating Your Gain
Your taxable gain is calculated as:
Sale price
minus Purchase price
minus Purchase costs (stamp duty, legal fees, survey)
minus Sale costs (estate agent fees, legal fees)
minus Improvement costs (extensions, conversions - not repairs)
minus Annual Exempt Amount (currently £3,000)
equals Taxable gain
60-Day Payment Deadline
CGT on residential property must be reported and paid within 60 days of completion. This is different from other assets where you can wait until your annual tax return. Failing to report within 60 days results in automatic penalties.
Need Help With CGT?
The 60-day reporting deadline catches many landlords out. If you're considering selling, seek specialist tax advice well in advance. Get in touch to learn more.