Landlords

Capital Gains Tax on Property: What You Need to Know

admin 26 Nov 2025 2 min read

If you sell a property that isn’t your main residence, you may owe Capital Gains Tax (CGT) on the profit. Understanding the basics helps you plan and avoid surprises.

What is Capital Gains Tax?

CGT is charged on the gain you make when selling certain assets, including second homes and buy-to-let property, above your annual allowance.

What you can deduct

Costs of buying and selling, such as legal and agent fees
Money spent on qualifying improvements
Your annual tax-free allowance

Reporting and paying

Gains on residential property usually need to be reported and paid within a set period after completion, so keep your records organised.

Tip: Keep receipts for improvement works — they can reduce your taxable gain when you sell.

Plan ahead

A good accountant can help you use allowances efficiently and time a sale to manage your liability. Always seek professional advice for your situation.

Frequently asked questions

Do I pay CGT on my main home?

Your main residence usually qualifies for relief, so most homeowners don’t pay CGT when selling the home they live in.

What rate is CGT on property?

Residential property gains are taxed at rates that depend on your income band, after your annual allowance.

When must I report a property gain?

Residential property gains generally must be reported and paid within a set window after completion — check current rules.

Final thoughts

CGT can be complex, so plan early and take professional advice. Good record-keeping makes the process far less daunting.