How to Calculate Capital Gains Tax on UK Property (2026/27)
Last updated 22 June 2026 · 12 min read · By the LandlordTaxAi Editorial Team
The short answer
To calculate Capital Gains Tax on a UK property: take the sale price, subtract the purchase price, then deduct allowable costs (legal and agent fees, the Stamp Duty you paid, and capital improvements). Take off the £3,000 annual exempt amount for 2026/27. Tax the rest at 18% within your remaining basic-rate band and 24% above it. On residential property you must report and pay within 60 days of completion.
Capital Gains Tax (CGT) is the tax you pay on the profit when you sell a property that is not your main home — a buy-to-let, a second home, or an inherited house you never lived in. It is charged on the gain, not the sale price, and a few reliefs and allowable costs can change the bill substantially. This guide walks through the exact calculation for the 2026/27 tax year, with a full worked example you can follow with your own numbers. Prefer to skip the maths? Use our free CGT calculator and come back to check the workings.
The six-step method
- 1
Work out your gain
Take the sale price and subtract what you originally paid for the property. This is your headline gain before any costs or reliefs.
- 2
Deduct allowable costs
Subtract buying and selling costs (Stamp Duty, legal fees, estate agent fees, survey fees) and the cost of capital improvements such as an extension or a new kitchen where there was none.
- 3
Apply private residence relief if it ever was your home
If you lived in the property as your main home for part of your ownership, exempt that proportion of the gain, plus the final 9 months of ownership.
- 4
Split for joint ownership
If you own the property jointly, divide the gain by each owner's share. Each owner then has their own allowance and pays at their own rate.
- 5
Deduct the annual exempt amount
Subtract the £3,000 Capital Gains Tax annual exempt amount for 2026/27 from each person's share of the gain to get the taxable gain.
- 6
Apply the 18% and 24% rates
Add the taxable gain on top of your income. Any part that falls within your remaining basic-rate band is taxed at 18%; anything above it is taxed at 24%.
The 2026/27 rates and allowance
Residential property is taxed at higher CGT rates than other assets. For 2026/27:
| Your situation | CGT rate on residential property |
|---|---|
| Gain within your remaining basic-rate band | 18% |
| Gain above the basic-rate band (higher / additional rate) | 24% |
| Annual exempt amount (tax-free gain) | £3,000 per person |
| Basic-rate band used for the 18% / 24% split | £37,700 (UK-wide) |
The key move is that you stack the gain on top of your income. Work out how much of your basic-rate band is left after your income, tax that slice of the gain at 18%, and tax everything above at 24%.
Free calculator · no sign-up
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.
Don’t want to do the maths by hand?
Our free CGT calculator does the 18%/24% split, private residence relief and joint-ownership shares for you — and tells you the 60-day deadline date.
Open the free CGT calculatorA full worked example
Priya is a higher-rate taxpayer. She sells a buy-to-let flat she never lived in. Here are her numbers:
| Sale price | £320,000 |
| Less: selling costs (agent + legal) | − £6,000 |
| Less: purchase price | − £200,000 |
| Less: buying costs (SDLT + legal + survey) | − £8,000 |
| Less: capital improvement (extension) | − £20,000 |
| = Chargeable gain | £86,000 |
| Less: annual exempt amount | − £3,000 |
| = Taxable gain | £83,000 |
| CGT at 24% (higher-rate taxpayer) | £19,920 |
Because Priya’s income already uses up her basic-rate band, the whole taxable gain is taxed at 24%. If she had been a basic-rate taxpayer with, say, £10,000 of basic-rate band left, the first £10,000 of the gain would be taxed at 18% and the remaining £73,000 at 24%.
Joint ownership doubles the allowance
If Priya owned the same flat 50/50 with her spouse, the £86,000 gain splits into £43,000 each. Each person uses their own £3,000 allowance, leaving £40,000 taxable each. If both are higher-rate taxpayers:
- £40,000 × 24% = £9,600 each
- £19,200 total — a saving of £720 versus single ownership, purely from the second £3,000 allowance.
The saving is larger if one spouse is a basic-rate taxpayer, because more of their share is taxed at 18%. Transfers between spouses and civil partners are CGT-free, so couples often equalise ownership before a sale — see CGT on jointly owned property and how to reduce CGT on a property sale.
If you ever lived there: private residence relief
If the property was your main home for part of the time you owned it, that proportion of the gain is exempt under private residence relief (PRR), plus the final 9 months of ownership regardless of whether you lived there at the end. For example, if you owned a flat for 10 years and lived in it for the first 4, then let it out, roughly 4 years plus the final 9 months are exempt and the remaining period is taxable. The full picture is in our private residence relief guide.
Does Scotland have a different CGT calculation?
This is one of the most common misconceptions. Capital Gains Tax is not devolved — the 18%/24% rates and the £3,000 allowance are identical across the whole UK. Scotland sets its own Income Tax bands, but those do not apply to CGT. For the 18%/24% split, even a Scottish taxpayer uses the UK-wide basic-rate band of £37,700. So a “capital gains tax Scotland calculator” gives exactly the same answer as a UK one — many tools get this wrong, but the rates are the same.
The 60-day reporting deadline
For UK residential property where CGT is due, you must report the gain and pay the tax within 60 days of completion through HMRC’s online UK Property Account. This is separate from your Self Assessment tax return, and the deadline is strict: late filing brings penalties and interest even if you later declare the gain on your return. Our guide to the 60-day CGT deadline explains the reporting process step by step.
What you can and cannot deduct
Reduces your gain
- Estate agent and solicitor fees
- Stamp Duty Land Tax paid on purchase
- Survey and valuation fees
- Extensions, loft conversions, first fitted kitchen
- Other capital improvements that added value
Does not reduce your gain
- Routine repairs and redecoration
- Mortgage interest and arrangement fees
- Furniture and white goods
- Letting agent and management fees
- Insurance and ground rent
Routine repairs and running costs are not lost — they are income-tax expenses you claim against your rental profit each year, not capital costs. See our allowable expenses guide for that side of the picture.
Frequently asked questions
How do I calculate Capital Gains Tax on a UK property?
Start with the sale price and subtract the original purchase price to get the gain. Then deduct allowable costs — buying and selling fees, Stamp Duty paid on purchase, and the cost of capital improvements. Apply private residence relief if the property was ever your main home. Subtract the £3,000 annual exempt amount for 2026/27. Finally, apply the residential property rates: 18% on any gain that fits within your remaining basic-rate Income Tax band and 24% on the rest. The result is your CGT bill, which on UK residential property must be reported and paid within 60 days of completion.
What is the Capital Gains Tax rate on property in 2026/27?
For UK residential property in the 2026/27 tax year the rates are 18% for gains that fall within your remaining basic-rate band and 24% for gains above it. These higher residential rates replaced the old 18%/28% rates and apply to second homes and buy-to-let property. Your main home is normally fully exempt through private residence relief.
How much is the Capital Gains Tax allowance for 2026/27?
The annual exempt amount for individuals is £3,000 for the 2026/27 tax year. It was cut from £6,000 in 2023/24 and £12,300 before that. Each person has their own £3,000 allowance, so a jointly owned property effectively gets £6,000 between two owners. The allowance cannot be carried forward — if you do not use it in the year, it is lost.
What costs can I deduct from my capital gain?
You can deduct the costs of buying and selling — estate agent and legal fees, survey costs, and the Stamp Duty Land Tax you paid when you bought. You can also deduct the cost of capital improvements that added value, such as an extension, a loft conversion or a first fitted kitchen. You cannot deduct routine repairs and maintenance (those are income-tax expenses against your rental profit), and you cannot deduct mortgage interest or the price of furniture.
Is Capital Gains Tax different in Scotland?
No. Capital Gains Tax is not devolved, so the rates (18% and 24% on residential property) and the £3,000 allowance are the same across England, Scotland, Wales and Northern Ireland. The common misconception is that Scotland's different income tax bands change your CGT — they do not. For CGT, even Scottish taxpayers use the UK-wide basic-rate band of £37,700 to decide how much gain is taxed at 18% versus 24%. So a 'Scotland CGT calculator' uses exactly the same rates as the rest of the UK.
When do I have to pay Capital Gains Tax on a property sale?
For UK residential property where tax is due, you must report the gain and pay the Capital Gains Tax within 60 days of the completion date, using HMRC's online UK Property Account. This is separate from your Self Assessment return. Missing the 60-day deadline triggers late-filing penalties and interest, even if you later include the gain on your tax return.
Do I pay Capital Gains Tax when I sell my own home?
Usually not. If a property has been your only or main residence for the whole time you owned it, private residence relief normally exempts the entire gain. You can lose part of the relief if you let the property out, used part of it exclusively for business, or the grounds exceed half a hectare. If it was your home for only part of the period, only that proportion — plus the final 9 months — is exempt.
LandlordTaxAi Editorial Team
The LandlordTaxAi editorial team writes about UK landlord tax, HMRC compliance, and Making Tax Digital. Our content is reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 22 June 2026 · Based on HMRC guidance on Capital Gains Tax rates and allowances (CG10240 onwards) and GOV.UK Capital Gains Tax rates. 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.