Capital Gains Tax on property (2026/27)

How CGT on property works

Capital Gains Tax (CGT) is charged on your gain — the profit — not on the sale price. The gain is what you sell for, minus what you paid, minus your allowable costs. Allowable costs include the Stamp Duty, legal and survey fees you paid on purchase, the agent and legal fees on the sale, and the cost of capital improvements such as an extension or a new kitchen. Day-to-day repairs and your mortgage interest are not allowable here.

CGT applies to investment and second properties. Your only or main residence is normally covered by Private Residence Relief, so a pure buy-to-let or a second home does not get that relief and the gain is taxable.

The 2026/27 rates: 18% and 24%

Residential property has two CGT rates. You pay 18% on the part of the gain that falls within your remaining basic-rate income tax band, and 24% on the part above it. To work out which applies, you add the taxable gain on top of your income for the year, so a landlord with a salary that already uses up the basic-rate band pays 24% on most of the gain.

The higher residential rate used to be 28%. It was cut to 24% for disposals on or after 6 April 2024, and the 30 October 2024 Budget kept residential property at 18% and 24% while bringing the rates on other assets up to match. So for the 2026/27 tax year the residential rates are 18% and 24%.

The £3,000 annual exempt amount

Every individual has a tax-free CGT allowance — the annual exempt amount — of £3,000 for 2024/25 and 2026/27. That is sharply down from £6,000 in 2023/24 and £12,300 in 2022/23, so far more property gains now fall into charge than a couple of years ago. A property owned jointly by a couple gets two allowances (£6,000 combined), and each owner is taxed on their own share of the gain.

Worked example: a higher-rate landlord selling a buy-to-let

Say you bought a buy-to-let for £250,000 and later sold it for £350,000, having added a rear extension along the way. You are a higher-rate taxpayer and own it on your own.

Held jointly by two higher-rate taxpayers instead, the £70,000 net gain would split £35,000 each, each owner would use their own £3,000 allowance (£32,000 taxable each at 24% = £7,680), trimming the combined bill to about £15,360 — the value of the second allowance. The exact figure always depends on your other income and gains in the year.

Report and pay within 60 days

CGT on UK residential property has its own fast deadline: you must report the gain and pay the tax within 60 days of completion, not in the following January’s Self Assessment return. You do this through a Capital Gains Tax on UK property account (a UK Property Account) on GOV.UK, and you still declare the disposal on your Self Assessment return if you file one. Miss the 60-day window and HMRC charges penalties and interest, so it pays to have your figures ready before you complete.

Limited companies pay corporation tax, not CGT

If you hold the property through a limited company — typically a special-purpose vehicle (SPV) — the company does not pay CGT at all. It pays corporation tax on the gain, and there is no £3,000 annual exempt amount for companies. Different rules, different rates, different paperwork. This is one of the reasons many landlords hold buy-to-lets through an SPV, alongside the way mortgage interest is treated. For how Stamp Duty works when a company buys, see stamp duty for limited companies. Whether personal or company ownership is better for you depends on your wider tax position, so take accountant advice before you structure a purchase.

Where Vortex Finance fits

We arrange the finance; you confirm the tax. Vortex Finance is a whole-of-market property finance broker, not a tax adviser. When you are buying, refinancing or releasing equity from an investment property, we shop 100+ lenders for the right facility — whether that is a buy-to-let mortgage, a commercial mortgage, a bridging loan or development finance.