Capital gains tax · Landlord guide · Updated May 2026
Capital gains tax for landlords: the complete UK guide.
Written by Iftikhar Rashid FCCA — Managing Partner, RR Accountants. 16 years in practice, specialist in property and landlord tax.
What is CGT for landlords?
Capital gains tax (CGT) applies when a UK landlord sells a residential property and makes a gain above the annual exempt amount. CGT on residential property is charged at higher rates than most other assets. Since October 2021, UK residents must report and pay CGT within 60 days of completion — not at the January self-assessment deadline. Private residence relief can reduce or eliminate the gain if the property was ever your main home. [VERIFY all rates at gov.uk/capital-gains-tax]
Who this applies to: UK landlords disposing of residential investment property.
Why it matters: Missing the 60-day deadline triggers automatic penalties. Failing to claim available reliefs costs money that cannot be recovered after filing.
CGT rates and thresholds for residential property (2026/27)
[VERIFY all figures at gov.uk/capital-gains-tax]
| Item | Rate / amount [VERIFY] | Source |
|---|---|---|
| Annual exempt amount | [VERIFY at gov.uk] | gov.uk/capital-gains-tax |
| CGT rate — basic-rate taxpayer (residential property) | [VERIFY at gov.uk] | gov.uk/capital-gains-tax-rates |
| CGT rate — higher/additional-rate taxpayer (residential) | [VERIFY at gov.uk] | gov.uk/capital-gains-tax-rates |
| 60-day reporting deadline from completion | 60 days | gov.uk/report-and-pay-your-capital-gains-tax |
| PPR final period exemption | [VERIFY at gov.uk] | gov.uk/tax-when-you-sell-your-home |
| CGT rate on property in limited company | Corporation tax rate on chargeable gain [VERIFY] | gov.uk/corporation-tax-rates |
How the CGT gain is calculated on a property disposal
Sale price
− Original purchase price
− Purchase costs (solicitor, survey, SDLT)
− Capital improvement costs (not repairs)
− Disposal costs (estate agent, solicitor)
= Gross gain
− Private residence relief (if applicable)
− Annual exempt amount [VERIFY]
= Taxable gain → CGT at applicable rate [VERIFY]
Allowable deductions
- ✓Purchase price and SDLT paid
- ✓Solicitor / conveyancing fees (purchase + sale)
- ✓Estate agent fees (sale)
- ✓Capital improvements (extension, new kitchen, new roof)
- ✓Survey and valuation fees
NOT deductible for CGT
- ✕Mortgage interest
- ✕Repairs and maintenance (revenue expenses)
- ✕Letting agent fees (already claimed for income tax)
- ✕Council tax, insurance during ownership
The 60-day CGT reporting rule
⏱ 60 days from completion — not January
Since October 2021, UK residents must report and pay any CGT on UK residential property disposals within 60 days of the completion date. This applies even if you have no tax to pay (e.g. the gain is fully covered by PPR). Missing this deadline triggers automatic penalties — even if the return is submitted correctly in January self-assessment.
Completion day
Clock starts from the date legal title passes — typically exchange + 28 days.
Within 60 days
Report the disposal via HMRC's online CGT service and pay any tax due. [VERIFY: current reporting portal at gov.uk]
January self-assessment
Include the disposal in your annual self-assessment. Any over/underpayment of CGT is reconciled here.
Capital gains tax for landlords — FAQs
How much capital gains tax do landlords pay on property?
CGT on residential property disposals is charged at a higher rate than most other assets. Basic-rate taxpayers and higher-rate taxpayers pay different rates. The gain is calculated as the sale price minus acquisition cost, improvement costs, and allowable expenses. Each year you have an annual exempt amount before CGT applies. [VERIFY: current CGT rates and annual exempt amount at gov.uk/capital-gains-tax]
What is the 60-day CGT reporting rule for landlords?
Since October 2021, UK residents must report and pay CGT on residential property disposals within 60 days of completion — not at the following January self-assessment deadline. This applies even if the property qualifies for full private residence relief. Missing the 60-day deadline triggers automatic penalties and interest. [VERIFY: current rules at gov.uk/report-and-pay-your-capital-gains-tax]
What is private residence relief (PPR)?
Private residence relief (PPR) exempts the gain attributable to periods when the property was your main home. If a property was your main residence for its entire ownership period, the full gain is exempt. If it was your main residence for part of the time, a proportion is exempt — plus the final 9 months of ownership always qualify regardless of use. [VERIFY: current PPR rules and final period at gov.uk]
How is the CGT gain calculated on a rental property?
The gain is: disposal proceeds minus (acquisition cost + purchase costs + allowable improvement costs + disposal costs). Allowable costs include solicitor fees, estate agent fees, and capital improvements (not repairs). Mortgage interest is NOT deductible for CGT. The annual exempt amount is then deducted, and CGT is charged at the applicable rate on the remaining gain.
Do I have to pay CGT if I sell my buy-to-let property?
Yes — unless the gain falls entirely within your annual exempt amount, or the property qualifies for full private residence relief. Most buy-to-let sales generate a taxable gain. The gain must be reported to HMRC within 60 days of completion and any CGT paid at that point. [VERIFY: current CGT rates and annual exempt amount at gov.uk/capital-gains-tax]
Can I reduce CGT on a property disposal?
Legally available strategies include: timing the disposal to fall in a tax year when you have a lower marginal rate; using your annual exempt amount; claiming private residence relief if you ever lived in the property; making pension contributions to reduce adjusted net income; disposing jointly with a spouse to use both annual exempt amounts; and gifting to spouse before disposal (holdover relief in some cases). The right approach depends on your specific circumstances. Not personalised advice.
What happens if I miss the 60-day CGT reporting deadline?
HMRC issues automatic late filing penalties: £100 if filed up to 6 months late; a further £300 (or 5% of tax due if higher) after 6 months; and a further £300 after 12 months. Interest accrues on late-paid tax from the 60-day deadline. We handle all 60-day returns for our landlord clients and ensure no deadlines are missed. [VERIFY: current penalty amounts at gov.uk]
Is CGT different if the property is in a limited company?
Yes. Properties held in a limited company do not attract personal CGT on disposal — instead, the gain is subject to corporation tax (via chargeable gains rules). The indexation allowance may apply to reduce the gain in the company. The company's corporation tax rate applies, not the individual CGT rate. The tax treatment of extracting proceeds from the company is a separate calculation.
Related guides and tools
- CGT calculator
- Accountants for UK landlords
- SPV vs personal name — property structure
- Section 24 — mortgage interest restriction
- MTD for landlords — complete guide
- Self Assessment for landlords
CGT planning
Selling a property? Plan before you complete.
We handle the 60-day CGT report, model available reliefs, and advise on timing. Book a call before you exchange — once you complete, options close.
Book a call →Iftikhar Rashid FCCA · 16 years · Specialist in property and landlord tax