Do I pay CGT if I sell my main home?

undefined PPR relief exempts the gain on your main home. If you've only ever owned one property and lived in it the whole time, there's no CGT on sale. If you owned two homes, you should have elected which was your main residence within 2 years. Even if you didn't live in the property for the entire ownership, the final 9 months are always exempt, and certain periods of absence can also qualify. Relevant legislation: TCGA 1992 s.222 (PPR relief); s.223 (final period of ownership — now 9 months from April 2020).. Example: A client sold their home of 15 years for £400,000 more than they paid. Full PPR relief applied — zero CGT. The gain would have been £96,000 without the relief. Common mistake: Assuming PPR applies automatically if the property is registered at your address. If you own two properties, HMRC looks at where you actually live — where your family is, where you're registered to vote, where your doctor is, etc. An election within 2 years gives certainty.

How do I report and pay CGT on property?

undefined Since 6 April 2020, CGT on UK residential property must be reported and paid within 60 days of completion. This is done through HMRC's online property CGT service. You'll need to calculate the gain, apply any reliefs (PPR, lettings), and pay the estimated CGT. The gain is then also reported on your Self Assessment tax return at year-end. If the estimate was too high, you'll get a refund; if too low, you'll pay the balance. Relevant legislation: FA 2019 Sch.2 (60-day reporting); TMA 1970 s.12Z (penalties for late returns).. Example: A client sold a buy-to-let on 1 March. The 60-day deadline was 30 April. We calculated the CGT, reported online on 15 March, and paid the £22,000 liability — well within the deadline, avoiding penalties. Common mistake: Waiting until your Self Assessment return to report property CGT. The 60-day deadline is strict and separate from Self Assessment. Missing it triggers a £100 penalty, increasing with time.

Tax Advisory

Capital Gains Tax on Property in the UK

CGT rates, reliefs and planning strategies for selling residential and commercial property in the UK.

Quick Answer

When you sell a property that isn't your main home, CGT applies at 18% (basic rate) or 24% (higher rate) on the gain. Principal Private Residence (PPR) relief can eliminate the gain on your main home entirely. Lettings relief (now restricted to £40,000 and only available where you lived in the property) may partially reduce the gain on a former home. CGT on property must be reported and paid within 60 days of completion.

CGT Rates on Property (2026-27)

Residential property gains are taxed at 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers. Non-residential (commercial) property gains are also taxed at 18%/24% but qualify for the standard annual exemption and may qualify for BADR if held within a trading structure.

The 24% rate (reduced from 28% in April 2024) applies to the entire taxable gain, not just the portion above the basic rate threshold. This means a higher-rate taxpayer with a £200,000 gain pays £48,000 in CGT.

Principal Private Residence (PPR) Relief

PPR relief is the most valuable CGT relief for property. If the property has been your only or main residence throughout the entire period of ownership, the full gain is exempt from CGT.

Even if you haven't lived in the property for the entire ownership period, PPR relief applies to the periods of actual occupation, plus the final 9 months of ownership (regardless of whether you lived there). Additional reliefs may apply for periods of absence (e.g., working abroad).

Full PPR relief: property was your main home throughout ownership — no CGT
Final 9 months: always exempt, even if you weren't living there
Lettings relief: up to £40,000 per owner — but only if you shared occupancy with the tenant
Periods of absence: some absences (e.g., working abroad up to 3 years) can count as occupation

Planning Strategies for Property CGT

If you're selling a property that isn't fully covered by PPR relief, planning strategies include:

Election for which property is your main residence (if you own two homes) — make the election within 2 years
Timing the sale to span two tax years (using two annual exemptions)
Transferring a share to a spouse before sale (to use their annual exemption and lower rate band)
Offsetting capital losses from other disposals in the same or previous years
Reinvesting gains in EIS-qualifying investments for CGT deferral
Considering incorporation relief if transferring a property portfolio to a company

Relevant Legislation

PPR relief: TCGA 1992 s.222-226. Lettings relief: TCGA 1992 s.223C (restricted from 6 April 2020). CGT rates on property: FA 2024 s.15. 60-day reporting: FA 2019 Sch.2.

Practical Example

A client selling a buy-to-let property with a £150,000 gain faced CGT of £35,280 (£147,000 at 24%). We identified that the client had lived in the property for 3 years out of a 10-year ownership period. PPR relief exempted 3/10 of the gain plus the final 9 months. Lettings relief (grandfathered) applied to the letting period. The taxable gain was reduced to £84,000, with CGT of £19,320 — a saving of £15,960.

Common Mistake

Failing to make a main residence election when owning two properties. If you own two homes, you have 2 years from acquiring the second to elect which is your main residence. Without an election, HMRC decides based on facts — which may not be the property with the larger gain. Another critical mistake is missing the 60-day CGT reporting deadline after selling a property, which triggers automatic penalties.

Frequently Asked Questions

Expert Answers

Frequently Asked Questions

Detailed answers with legislation references, practical examples and common pitfalls.

Need Specialist Advice?

Our tax advisers can help you navigate tax advisory with confidence.

Initial discussions are informal and without obligation.

Book a Consultation Send an Enquiry