Private Residence Relief Calculator: UK Landlord Guide

Private residence relief: what it is and who qualifies

When you sell a property that has been your only or main home throughout your ownership, the entire gain is normally exempt from capital gains tax on property. That is PRR in its simplest form. For most owner-occupiers who never let the property, the relief is automatic and complete — there is nothing to calculate.

The picture is more complicated for landlords. If you lived in the property for part of your ownership and let it for the rest, you receive PRR only on the qualifying periods. The remaining gain — the part attributable to the letting period — is potentially taxable. Understanding how to calculate that split, and which additional reliefs you can claim on top, is where the real tax saving lies.

PRR is a statutory relief under section 222 of the Taxation of Chargeable Gains Act 1992. It applies to a dwelling that has been your only or main residence at some point during your ownership. You do not need to have lived there for a minimum period — even a short period of genuine occupation can trigger entitlement, though HMRC will scrutinise very short periods carefully.

The key conditions are:

• The property must be a dwelling — a house, flat, or part of a building used as a residence.
• You must have lived in it as your main home at some point during the period of ownership you are calculating relief on.
• The property must not have been used exclusively for a business purpose (a room used partly for work is fine; a property converted entirely into office space is not).
• The garden or grounds must not exceed 0.5 hectares (or a larger area that HMRC accepts as reasonably required for the enjoyment of the house).

For the CGT rates that apply to the gain not covered by PRR, see HMRC's capital gains tax rates guidance. Residential property gains currently attract 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers (rates as of April 2026).

The final 9-month rule: always exempt regardless

One of the most valuable — and least understood — elements of PRR is the final period exemption. The last 9 months of ownership always count as qualifying periods, even if you were not living in the property during that time. This was put in place to help people who have moved to a new home but have not yet sold their old one, giving them time to complete a sale without facing CGT on that final stretch.

The reduction from 36 months to 9 months has significantly narrowed the benefit for landlords who let their former homes for long periods before selling. If you left the property in January 2020 and sold it in January 2026 — six years later — only the final 9 months of that six-year letting period now attract the final exemption, not the full 36 months that would have applied under the old rules.

The final 9 months are added to any actual periods of occupation when working out your PRR fraction. They do not replace your occupation months — they are additional qualifying months on top.

Private residence relief calculator: the formula explained

The PRR formula is straightforward once you identify the three inputs: total months of ownership, qualifying months (occupation plus final 9), and total capital gain.

Worked example

Consider a landlord who bought a flat in January 2015, lived in it as their main home for three years until January 2018, then moved out and let it from February 2018. The property is sold in January 2026, giving a total ownership of 11 years (132 months). The total capital gain is £120,000.

Without PRR, the full £120,000 gain (less the £3,000 exemption) would attract CGT of £27,840 at 24%. PRR saves this landlord approximately £9,578 in CGT. To run your own numbers, our CGT calculator includes full PRR calculation — enter your purchase date, move-out date, and sale date and it works out the fraction automatically.

Note that the annual CGT exempt amount has been reduced substantially in recent years — from £12,300 in 2022/23 to £3,000 from 2024/25 onwards. Do not rely on older worked examples that use the higher figure.

Lettings relief after April 2020: why most landlords do not qualify

Lettings relief was once a generous addition to PRR. Before 6 April 2020, any landlord who had lived in the property at any point during ownership could claim up to £40,000 of additional relief on the gain attributable to the letting period. For couples owning jointly, that meant up to £80,000 of combined lettings relief on top of PRR.

The Finance Act 2020 fundamentally changed this. From 6 April 2020, lettings relief is only available if you and your tenant occupied the property at the same time. In practice, this means you must have been living in the property — not just owning it — during the period you were also letting part of it. The relief now applies almost exclusively to live-in landlords who let a room under the Rent a Room scheme while remaining in residence themselves.

For those who do qualify, the relief is capped at the lowest of three figures: £40,000; the amount of PRR you are claiming; or the gain attributable to the letting period. In most cases where lettings relief applies at all post-2020, the PRR cap is the binding constraint.

The practical conclusion for most buy-to-let landlords is that lettings relief no longer forms part of their CGT planning. The calculation now relies entirely on PRR and the final 9-month rule.

Periods of absence that still qualify for PRR

Not every period away from your home breaks the PRR entitlement. HMRC allows certain absences to count as qualifying periods, provided the property was your main residence before and after the absence (with limited exceptions for the last qualifying period before sale). HMRC's guidance on working out your gain covers the qualifying absence rules.

The qualifying absence rules are often overlooked. A landlord who let a property because they were posted overseas by their employer may find that the entire letting period qualifies for PRR — not just the period they lived there. This can produce a PRR fraction of 100% in the right circumstances.

Absences do not have to be consecutive or in a single block. You can aggregate several periods of absence under the “any reason” category, provided the total does not exceed three years across the entire ownership period.

Nominating a main residence when you own two properties

If you own two or more properties and genuinely use more than one as a home at the same time, you can elect which one is your principal private residence for PRR purposes. This election must be made within two years of the date you started using the second property as a home — not the date you purchased it.

The nomination must be made in writing to HMRC and must specify which property you are designating as your main residence from a particular date. Once made, you can vary the nomination at any time — there is no minimum period for which a nomination must stand.

The strategic use of this election is well-established tax planning. For example, if you own both a main family home and a second property that is appreciating faster, you might temporarily nominate the second property for a short period to establish PRR entitlement on it (including the final 9-month exemption at sale), then switch back. This must reflect genuine occupation and intention — HMRC can challenge nominations it regards as artificial.

If you do not make an election within two years, HMRC will determine which property was your main residence based on the facts. This is an area where professional advice is particularly valuable, as the facts-and-circumstances test can produce unexpected results.

Separation and divorce: how PRR is affected

Divorce and separation frequently involve the matrimonial home, and the PRR position requires careful handling. Where one spouse or civil partner leaves the family home but retains a beneficial interest in it, their entitlement to PRR starts to run down from the date they leave — not the date of the final legal settlement.

Before April 2023, separated spouses had only until the end of the tax year of permanent separation to transfer assets between them on a no-gain no-loss basis. The Finance Act 2023 extended this window to three years from the date of permanent separation, giving separating couples significantly more time to restructure ownership without triggering a CGT charge.

The departing spouse's PRR position depends on the timeline. If the property is sold within the 9-month final period from their departure, the full gain on their share should remain exempt. If the sale occurs much later, a portion of their gain may fall outside PRR — even though their former spouse continued to live there throughout. Each owner's PRR is calculated individually.

There is a specific concession in HMRC's guidance (Extra Statutory Concession D6) that allows the absent spouse to treat the period after their departure as qualifying for PRR if the other spouse was living there under a court order and the departing spouse did not elect another property as their main residence during the same period. This concession can make a material difference in long divorces.

Joint ownership: PRR calculated per owner

When a property is owned jointly — by a couple, business partners, or family members — each owner has their own PRR entitlement. The periods of occupation and the PRR fraction are calculated separately for each person, because each owner may have different occupation histories.

A common scenario: two siblings inherit a property. One lived in it for five years, the other never did. On sale, the sibling who occupied it will have a substantial PRR fraction; the one who never lived there will have none (other than the final 9 months from the date the first sibling vacated, if applicable).

Another scenario: a couple purchases a buy-to-let. One partner briefly moved in to establish occupation, the other never did. Only the partner who genuinely occupied the property can claim PRR for that period. HMRC looks at the facts, not just the paperwork — a nominal overnight stay is unlikely to be accepted as occupation.

For a detailed guide to how CGT and PRR interact in jointly owned property — including how gains are split between owners and how to report each owner's gain separately — see our guide to CGT on jointly owned property.

Our CGT calculator handles joint ownership with separate PRR periods for each owner. Our CGT calculator includes full PRR calculation with a joint ownership mode — each owner enters their own occupation dates independently.

Reporting a property sale with PRR: the 60-day deadline

Even when PRR substantially reduces your CGT liability, you may still be required to report the disposal to HMRC. Since 27 October 2021, UK residents who sell residential property with a chargeable gain must report and pay any CGT within 60 days of completion. Failure to do so results in automatic late-filing penalties and interest on any tax due.

If PRR eliminates the entire gain — or reduces the gain below the annual exempt amount — there is no CGT to pay and the 60-day report is not required. However, you must ensure your PRR calculation is accurate before concluding no report is needed. An error in the qualifying months figure or the gain calculation could leave you with an unreported taxable gain and penalties.

For a full walkthrough of the 60-day reporting process, the online service, and what happens if you miss the deadline, read our guide to the 60-day CGT reporting deadline.

Once you have reported and paid via the 60-day service, you must also declare the disposal on your Self Assessment tax return for the relevant year. The two processes are separate — submitting the 60-day report does not replace your Self Assessment obligation.

Frequently asked questions