Selling a rental property in 2026? Your Capital Gains Tax, explained

Selling a buy-to-let or second home triggers Capital Gains Tax, and a deadline most sellers have never heard of: report and pay within 60 days of completion. Here is how the bill is worked out in 2026/27, and a calculator to estimate yours.

How the gain is calculated

Start with the sale price. Deduct what you paid for the property, your buying and selling costs (legal fees, agent fees, survey, the SDLT you paid when buying) and capital improvements such as an extension or a new kitchen, though not repairs and maintenance. Knock off the £3,000 annual exempt amount. What remains is taxed at 18% inside your unused basic rate band and 24% above it.

A worked example

Sell for £300,000 a property bought at £200,000, with £8,000 of buying and selling costs and £12,000 of improvements, while earning £30,000: the taxable gain is £77,000 and the CGT roughly £17,264. On a jointly owned property the gain splits between owners, doubling the allowance and often doubling the amount taxed at 18% instead of 24%.

The 60-day trap

UK residential disposals must be reported to HMRC with a payment on account of the tax within 60 days of completion. Miss it and penalties start at £100 and escalate, with interest on the tax. Conveyancers routinely fail to mention it. If you completed recently and this is news to you, act now.

Plan before exchange, not after completion

• Transfers between spouses before sale can move gain to the partner with the lower rate and a spare allowance.
• Completing just after 5 April can push the bill a whole year away and use a fresh allowance.
• Every receipt for improvements ever done to the property is money: dig them out before selling, not after.

Estimate your bill with the property CGT calculator, then talk to us: we prepare the 60-day return itself as part of our property service.