Capital Gains Tax on Property in 2026: What You Actually Pay

Stamp duty gets the attention because you pay it at the start, in cash, when you're already stretched. Capital gains tax gets far less, because it arrives at the end, out of money you've just received — which makes it feel less painful and considerably easier to get wrong.

It is also the property tax with the shortest deadline in the UK system: 60 days from completion to report and pay. This guide is the 2026 position, from primary sources, with a worked example at a real median sale price.

If you're after the tax on the way in rather than the way out, our 2026 stamp duty guide covers all three UK regimes.

The 2026 rates

Who / what	Rate
Individual — gain within the basic-rate band	18%
Individual — gain above the basic-rate band	24%
Trustees	24%
Personal representatives	24%
Annual exempt amount (individuals, personal reps)	£3,000
Annual exempt amount (most trustees)	£1,500
Business Asset Disposal Relief (from 6 April 2026)	18%

Source: GOV.UK — Capital Gains Tax rates and allowances.

One structural change worth noting: from 6 April 2026, residential property is no longer a separate rate category. It used to be taxed at higher rates than other assets. The gap closed from the other direction — the general rates were raised to 18% and 24% to match — so residential property now simply sits at the standard rates. The rate you pay didn't change. The framing did.

The annual exempt amount is £3,000 and is unchanged for 2026-27. It's per person, so joint owners get £3,000 each. It cannot be carried forward.

The basic-rate band is a mirage on property gains

This is the most important thing on this page, and it is almost universally misunderstood.

The 18% rate isn't a rate for basic-rate taxpayers. It's a rate for the portion of the gain that fits inside whatever is left of your basic-rate band after your income has filled it. For 2026-27 the basic-rate band is £37,700. If you earn £30,000 of taxable income, you have £7,700 of band left — so only £7,700 of your gain is taxed at 18%, and everything above that is taxed at 24%.

Property gains are large. £7,700 of headroom disappears instantly.

Here's what that means in practice, on the worked example below — a £48,694 gain:

Taxpayer	Calculation	Tax due
Basic rate (£30,000 income)	£7,700 at 18% (£1,386) + £37,994 at 24% (£9,119)	£10,505
Higher rate (£60,000 income)	£45,694 at 24%	£10,967
Difference		£462

A basic-rate taxpayer saves £462 against a higher-rate taxpayer on the same gain — about 0.9% of the gain. The effective rate is 21.6% versus 22.5%. If you've been assuming your basic-rate status means an 18% bill on a property sale, the real answer is that you're paying very nearly the full 24% and you should budget accordingly.

Source: GOV.UK — Capital Gains Tax rates for the band mechanics.

What you can and can't deduct

The list of allowable costs is exhaustive — HMRC's Capital Gains Manual is explicit that nothing outside it is allowable unless the legislation specifically provides for it.

Deductible:

• What you paid for the property (or its market value, if you were gifted it, inherited it, or bought it below market value to help someone out)
• Stamp duty land tax paid on acquisition — explicitly allowable as a cost of transfer
• Fees for professional services on both purchase and sale: surveyor, valuer, auctioneer, accountant, agent, legal adviser
• Estate agent commission on the sale
• Costs of advertising to find a buyer
• Costs of any valuation needed for the capital gains computation itself
• Capital improvements — an extension, a loft conversion, a new kitchen where none existed

Not deductible:

• Mortgage interest. This surprises people every time. Interest is a revenue cost, not a capital one.
• Maintenance, repairs and decorating. Repainting is upkeep, not improvement.
• General market advice, portfolio management fees, or subscriptions.

Sources: GOV.UK — Tax when you sell property: work out your gain, HMRC Capital Gains Manual CG15250 — incidental costs.

The capital-versus-revenue line is where most of the money is, and it rewards record-keeping. An extension you built in 2020 is deductible in 2026 — but only if you can evidence what it cost. Keep the invoices. Ten years later, a shoebox of builder receipts is worth 24% of its face value.

Worked example: a buy-to-let at the UK median

A landlord bought a rental property in 2016 for £200,000 and sells it in 2026 at £287,500 — HM Land Registry's median sold price across 635,379 arm's-length sales in the 12 months to March 2026. They extended it in 2020 for £25,000.

Item	Amount
Sale price	£287,500
Less purchase price	−£200,000
Less SDLT paid in 2016 (incl. 3% surcharge then in force)	−£7,500
Less legal fees on purchase	−£1,200
Less extension (capital improvement)	−£25,000
Less estate agent at 1.42% inc VAT	−£4,083
Less legal fees on sale	−£1,023
Chargeable gain	£48,694
Less annual exempt amount	−£3,000
Taxable gain	£45,694

Tax due: £10,967 for a higher-rate taxpayer; £10,505 for a basic-rate taxpayer on £30,000 of income.

Payable within 60 days of completion.

Two observations. First, the deductions did real work: without the £38,806 of allowable costs, the gain would have been £87,500 and the higher-rate tax bill £20,280 — so the paperwork saved £9,313. Second, the tax is roughly 12.5% of the gross sale price minus the mortgage for a typical geared landlord, which is why it belongs in any hold-versus-sell model rather than being discovered afterwards.

Note that the £4,083 agent fee is deductible here — but it's still £4,083. Our cost of selling guide has the full breakdown of what leaves your account on the way out.

Private residence relief: why most sellers pay nothing

If you're selling your only or main home, you almost certainly owe nothing. Private residence relief exempts the gain, and two details make it more generous than people expect:

• The final 9 months of ownership always qualify for relief, whatever you did with the property in that time — provided it was your only or main residence at some point. So moving out before you sell doesn't cost you relief, as long as the sale completes within nine months.
• For disabled sellers and those moving into care homes, the final period is 36 months, not nine.

Relief becomes partial if part of the property was let while you lived in another part, if part was used exclusively for business, or if the grounds exceed half a hectare. Lettings relief only applies to shared occupancy — where you let part of the house while another part remained your main residence. It does not apply where the whole house was let for a period, a restriction in force since April 2020 that still catches out accidental landlords who moved out and rented the place before selling.

Sources: GOV.UK — HS283 Private Residence Relief (2026), HMRC Capital Gains Manual CG64985 — final period exemption.

The 60-day trap

This is the rule that produces the most avoidable penalties in UK property tax.

• If you sell UK residential property and there's capital gains tax to pay, you must report and pay within 60 days of completion.
• The route is HMRC's Capital Gains Tax on UK property account — a separate service from self assessment.
• The deadline runs from completion, not exchange, and not the tax year end.
• It applies even if you also file a self assessment return — you do both.
• Late filing triggers penalties, and late payment triggers interest plus further penalties charged at intervals.

Source: GOV.UK — Report and pay your Capital Gains Tax.

The reason this catches people: every other tax in a normal person's life is annual. You sell in June, you think about tax the following January, and by then you're four months late. Put the 60-day date in your calendar on the day you exchange, and tell your conveyancer you'll need the completion statement promptly.

Non-residents have their own version of this obligation: you must report a disposal of UK property within 60 days even if there's no tax to pay and even if you make a loss (GOV.UK — CGT for non-residents).

Three legitimate ways to pay less

Nothing exotic, and none of it is advice — take it to an accountant with your actual numbers.

1. Use both allowances on a jointly-owned property. Two individuals, £3,000 each. Transfers between spouses and civil partners are on a no-gain-no-loss basis, so ownership can often be arranged before a sale — but the timing and the paperwork matter, and getting it wrong after exchange is usually too late.
2. Time the disposal across tax years. The annual exempt amount resets each 6 April and can't be carried forward. Completing on 6 April rather than 5 April moves the gain into a new tax year — potentially a year in which your income, and therefore your remaining basic-rate band, is different.
3. Find the improvement receipts. The most reliably valuable hour you'll spend. Every £1,000 of evidenced capital improvement is £240 off a higher-rate bill.

What doesn't work: deducting mortgage interest, deducting repairs, or hoping the 60-day deadline is advisory.

Before you sell anything

Every number on this page starts with the sale price, and the sale price is the one input you can still influence. A gain is the difference between two numbers — and knowing what the property is genuinely worth today, rather than what an agent hopes to list it at, is what makes a hold-versus-sell decision a decision rather than a guess.

Offrly's free valuation is regression-based pricing on photo-aware, micro-neighbourhood-aware comparables — built from what actually sold nearby.

Get a free Offrly valuation → · See real sold prices in your area → · Stamp duty on the way in →

Sources

• GOV.UK — Capital Gains Tax rates and allowances — the 18%/24% rates, £3,000 annual exempt amount for 2025-26 and 2026-27, £1,500 for trustees, 24% for trustees and personal representatives, and Business Asset Disposal Relief at 18% from 6 April 2026.
• GOV.UK — Capital Gains Tax: what you pay it on, rates and allowances — how the basic-rate band determines whether 18% or 24% applies, and the £37,700 basic-rate band.
• GOV.UK — Tax when you sell property: work out your gain — deductible costs, the improvement-versus-upkeep distinction, and the market-value rule for gifts and inherited property.
• HMRC Capital Gains Manual CG15250 — incidental costs of acquisition and disposal — the exhaustive list of allowable incidental costs, including stamp duty land tax on acquisition.
• GOV.UK — HS283 Private Residence Relief (2026) — private residence relief, the 9-month final period exemption, the 36-month disabled/care-home period, and the shared-occupancy restriction on lettings relief.
• HMRC Capital Gains Manual CG64985 — final period exemption — the 9-month final period for disposals on or after 6 April 2020.
• GOV.UK — Report and pay your Capital Gains Tax — the 60-day reporting and payment deadline and the online property account.
• GOV.UK — Capital Gains Tax for non-residents: UK residential property — the non-resident reporting obligation.
• HM Land Registry Price Paid Data — arm's-length residential sales (category A), 12 months to 31 March 2026 (635,379 transactions), analysed by Offrly for the £287,500 median sale price used in the worked example. Contains HM Land Registry data © Crown copyright and database right. This data is licensed under the Open Government Licence v3.0.

Disclaimer: This article describes UK capital gains tax rules on residential property in force as of July 2026, from the linked primary sources. It is not tax advice. The worked example is illustrative and uses stated assumptions; your own figures, income, ownership history and any reliefs will change the answer materially. Bespoke situations — trusts, divorce and separation transfers, probate, mixed-use property, non-residence, properties owned before 31 March 1982, and company-held property — have specific rules not covered here. Take your actual numbers to a qualified accountant or tax adviser before acting. Offrly valuations are indicative market guidance, not regulated valuations or financial advice — use a RICS-qualified surveyor for mortgage, insurance or probate purposes.

Questions