Quick Summary
- Gains on residential property are taxed at 18% (basic rate) or 24% (higher rate).
- Everyone gets a £3,000 annual exempt amount.
- You must report and pay within 60 days of completion when tax is due on UK residential property.
- Buying and selling costs and capital improvements reduce your gain.
- Your main home is normally exempt under Private Residence Relief.
If you sell a property that isn't your main home — a buy-to-let flat, a holiday home or an inherited house — you may owe Capital Gains Tax (CGT). The rules have a tight deadline that catches many landlords out. Here's how it works in 2026/27.
How much CGT will I pay?
CGT is charged on the gain — the difference between what you paid and what you sold for, less allowable costs — not the full sale price.
- Annual exempt amount: the first £3,000 of total gains in a tax year is tax-free.
- 18% on the part of the gain that falls within your unused basic rate band.
- 24% on the rest.
The basic rate band for CGT is the UK band (up to £50,270 of total income and gains), even for Scottish taxpayers. Your other income for the year uses up part of it first.
Worked example
A Glasgow landlord bought a flat for £120,000 and sells it for £185,000. Costs: £2,500 legal and survey fees and LBTT on purchase, £3,500 estate agent and legal fees on sale, and £9,000 for an extension.
Gain: £185,000 − £120,000 − £2,500 − £3,500 − £9,000 = £50,000. Less £3,000 exempt amount = £47,000 taxable.
Their salary is £40,000, leaving about £10,270 of basic rate band. Tax: £10,270 × 18% + £36,730 × 24% = about £10,664.
The 60-day rule
When you sell UK residential property and CGT is due, you must report the sale and pay the estimated tax within 60 days of completion, using HMRC's online Capital Gains Tax on UK property account. This is separate from your annual tax return, where the gain is also included.
Miss the 60 days and you face late filing penalties and interest. If you're selling, contact your accountant before completion so the figures are ready.
Costs that reduce your gain
- Solicitor, survey and estate agent fees on buying and selling
- Land and Buildings Transaction Tax (LBTT) or Stamp Duty paid on purchase
- Capital improvements that add to the property, such as extensions and loft conversions (not like-for-like replacements)
Ordinary repairs and maintenance are not allowed against the gain — they're claimed against rental income instead. Mortgage interest and mortgage fees are not allowable for CGT.
Your main home: Private Residence Relief
Selling your only or main home is normally CGT-free. If a property was your home for part of the time you owned it, you get relief for that period plus the final 9 months of ownership. Lettings relief now only applies where you shared the home with your tenant.
Ways to reduce CGT legally
- Joint ownership — transfers between spouses or civil partners are tax-neutral, so both can use their £3,000 exemption and basic rate band.
- Timing — selling in a tax year when your income is lower leaves more of the gain at 18%.
- Losses — capital losses from other disposals can be set against gains.
- Pension contributions — personal contributions extend your basic rate band.
Separating couples have up to three years after separation to transfer assets between them without a CGT charge.
Frequently Asked Questions
What is the CGT rate on property in 2026/27?
Gains on residential property are taxed at 18% within the basic rate band and 24% above it, after the £3,000 annual exempt amount.
When do I have to pay CGT after selling a property?
For UK residential property, you must report the sale and pay the estimated CGT within 60 days of completion through HMRC's online property service.
Do I pay CGT on selling my own home?
Usually not. Private Residence Relief normally exempts your only or main home. If it was your home for only part of the time, you get relief for that period plus the final 9 months.
Can I deduct mortgage interest from capital gains?
No. Mortgage interest isn't allowable for CGT. You can deduct buying and selling costs, LBTT or Stamp Duty and capital improvements.
Do Scottish taxpayers pay different CGT rates?
No. CGT is a UK tax, and the 18% and 24% rates and UK basic rate band apply to Scottish taxpayers too.
Selling a Property?
We calculate your gain, file the 60-day CGT return and look for every legitimate way to reduce the tax.
Sardar Muhammad, AAT
Sardar is the founder of LimeTree Accounting Solutions, an AAT-accredited practice in Govanhill, Glasgow. He works with sole traders, tradespeople, landlords and small limited companies across Glasgow and Clydebank.
This guide is general information based on UK and Scottish tax rules as at 13 October 2026. It is not personal advice. Rates and thresholds change, so speak to us about your own situation.