When you sell a rental property for more than you paid, the profit is usually subject to Capital Gains Tax (CGT) — and residential property has its own rules, rates and a tight 60-day reporting deadline. Here’s how the gain is worked out, what you can deduct, the reliefs, and how to report it.
Capital Gains Tax is charged on the gain you make when you dispose of an asset that isn’t your main home. For landlords, that usually means selling (or gifting) a buy-to-let. Residential property is taxed at higher CGT rates than most other assets.
The gain is broadly the sale price less what you paid, less allowable costs:
Residential property gains are taxed at higher rates than other assets, and the rate depends on whether the gain falls within your basic-rate band or above it.
The annual exempt amount has been cut significantly — check GOV.UK for the current figures before you sell.
If you’re an individual disposing of UK residential property and there’s CGT to pay, you must report the disposal and pay the tax within 60 days of completion — separately from your normal Self Assessment. Missing this deadline triggers penalties.
For UK residential property, within 60 days of completion if there’s tax to pay — separately from Self Assessment.
A tax-free slice of gains each year. It’s been reduced substantially recently, so check the current figure on GOV.UK.
Yes — genuine capital improvements (like an extension) reduce the gain, but routine repairs don’t (those go against income instead).
No — a company pays Corporation Tax on the gain, not CGT. It’s one of several personal-vs-company differences (see our CT600 guide).
Your main residence is usually covered by Private Residence Relief, so normally there’s no CGT on it.
This guide is general information, not tax advice. Tax rules, rates and allowances change frequently — check GOV.UK and speak to a qualified accountant for your own circumstances.
PropertyApp keeps your purchase price, improvements and disposal details in one place — and preserves a sold property’s history — so the CGT calculation is straightforward. Free to start.
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