Capital Gains Tax on a Second Home (2026/27)
Last updated 23 June 2026 · 9 min read · By the LandlordTaxAi Editorial Team
The short answer
When you sell a second home you pay Capital Gains Tax at 18% within your remaining basic-rate band and 24% above it, on the gain after the £3,000 allowance and your allowable costs. Unlike your main home there is normally no private residence relief — so the whole gain is usually taxable. Report and pay within 60 days of completion.
A “second home” for CGT means any residential property that is not your only or main residence — a holiday home, a city flat you keep for work, a property you bought for a relative, or a former home you moved out of. Because it is residential, it attracts the higher CGT rates. This guide shows exactly how the bill is worked out, when private residence relief can help, and a full worked example. To get a figure instantly, use our free CGT calculator.
The 2026/27 rates and allowance
| Your situation | CGT rate on the second home |
|---|---|
| Gain within your remaining basic-rate band | 18% |
| Gain above the basic-rate band | 24% |
| Annual exempt amount | £3,000 per person |
| Reporting and payment deadline | 60 days from completion |
As with all residential property, you stack the gain on top of your income to decide the 18%/24% split. If you own the second home jointly with a spouse or partner, each of you has a separate £3,000 allowance and is taxed at your own rate — which can halve the bill.
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Capital Gains Tax calculator
Estimate the CGT on your property sale for 2026/27
Result
- Total gain
- £66,000
- Less annual exempt amount
- − £3,000
- Taxable gain
- £63,000
- CGT at 24%
- £15,120
- Net proceeds after CGT
- £50,880
Estimate based on verified 2026/27 UK rates. Informational only — not personal tax advice.
See your second-home CGT bill now
Enter your purchase price, sale price and costs — the calculator does the 18%/24% split, your allowance and joint ownership.
Open the free CGT calculatorWhen private residence relief can help
Private residence relief (PRR) only applies to a property that has genuinely been your main home for some of the time you owned it. If your second home was once where you actually lived, you can exempt the proportion of the gain for that period — plus the final 9 months of ownership, which are always exempt once the property has been your main residence at any point.
If you own two homes and live in both at different times, you can formally nominate which one counts as your main residence for CGT. You have two years from the date you acquire a second residence to make this election, and you can vary it later. Used carefully, a nomination can steer relief towards the property with the bigger gain — but it must reflect real occupation, not just a letter to HMRC.
A full worked example
Helen and Mark, both higher-rate taxpayers, jointly own a coastal holiday home they have never lived in. They sell it.
| Sale price | £400,000 |
| Less: selling costs | − £7,000 |
| Less: purchase price | − £280,000 |
| Less: buying costs incl. SDLT surcharge | − £15,000 |
| Total gain | £98,000 |
| Each owner’s share (50%) | £49,000 |
| Less: allowance each (£3,000) | − £3,000 |
| Taxable gain each | £46,000 |
| CGT each at 24% | £11,040 |
| Combined CGT bill | £22,080 |
By holding the property jointly, Helen and Mark used two £3,000 allowances instead of one, saving £1,440 compared with sole ownership. They must each file a 60-day report and pay their share within 60 days of completion.
Frequently asked questions
How much Capital Gains Tax do I pay on a second home?
You pay 18% on any gain that falls within your remaining basic-rate Income Tax band and 24% on the rest, after deducting the £3,000 annual exempt amount for 2026/27. A second home gets the higher residential rates and, unlike your main home, no automatic private residence relief — so the taxable gain is usually the full difference between sale and purchase price, less allowable costs and improvements.
What is the difference between a second home and a buy-to-let for CGT?
For Capital Gains Tax there is no difference in the rates — both a second home and a buy-to-let are residential property taxed at 18%/24% with the £3,000 allowance. The practical difference is during ownership: a let property generates rental income and lets you deduct running costs against that income, while a personally used second home does not. On sale, both are treated the same way unless one of them qualified as your main residence at some point.
Can I avoid CGT on a second home by making it my main residence?
You can reduce it, not eliminate it entirely. If you genuinely live in the property as your main home for a period, you can nominate it as your main residence (you have two years from acquiring a second home to make the election). Private residence relief then exempts the gain for the period it was your main home, plus the final 9 months of ownership. The gain for the rest of the ownership period remains taxable. Quality of occupation matters — HMRC looks at whether it was truly your home, not a paper nomination.
What costs can I deduct when selling a second home?
You can deduct buying and selling costs — estate agent fees, legal and conveyancing fees, survey costs, and the Stamp Duty (or LBTT in Scotland) you paid on purchase, including any second-home surcharge. You can also deduct the cost of capital improvements such as an extension, a loft conversion or a first fitted kitchen. You cannot deduct routine repairs, decorating, mortgage interest, or furniture.
Do I have to report the sale within 60 days?
Yes. If you sell a UK residential second home at a gain with tax to pay, you must report and pay the Capital Gains Tax through HMRC's UK Property Account within 60 days of completion. This is separate from your Self Assessment return, and the deadline applies even if you also report the gain later on your tax return.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 23 June 2026 · Based on HMRC guidance on Capital Gains Tax rates, allowances and private residence relief. Figures are for the 2026/27 tax year. This article is informational only and does not constitute tax advice. Always check the latest details on GOV.UK or with a qualified accountant.