selling

Capital gains tax on a property sale: worked examples

Capital gains tax on a property sale in England and Wales: how the gain is worked out, the 2026 to 2027 rates, the 60 day rule and four worked examples.

4 min read
Last reviewed 4 November 2026
By Your Property Check team

Part 1 of 7

General information, not advice

This guide covers capital gains tax (CGT) for UK residents selling residential property, with figures for the 2026 to 2027 tax year. It is general information, not advice, and the rules for your situation may differ, so check GOV.UK or speak to a tax adviser. See our terms. We read the GOV.UK pages on 4 November 2026. The Autumn Budget may change the rates or allowances, so recheck before you sell.

Part 2 of 7

Who pays

GOV.UK says you may have to pay CGT if you make a profit, called a gain, when you sell property that is not your home. Examples it gives include buy-to-let properties, business premises, land and inherited property. Your own main home is usually covered by private residence relief. CGT is a tax on the gain. GOV.UK states plainly that it is the gain you make that is taxed, not the amount of money you receive.

Part 3 of 7

How the gain is worked out

GOV.UK says your gain is usually the difference between what you paid for the property and what you sold it for. You can deduct the costs of buying, selling or improving the property, such as estate agents' and solicitors' fees, and the cost of improvement works such as an extension. Normal maintenance costs, such as decorating, do not count. Where you own a share of a property jointly, you work out the gain on your own share.

Part 4 of 7

The 2026 to 2027 rates and allowance

Item	Figure	Source
Annual exempt amount	£3,000	GOV.UK, 2026 to 2027
Basic rate taxpayers	18% on the part of the gain within the basic Income Tax band	GOV.UK rates page
Higher and additional rate taxpayers	24% on gains from 6 April 2026	GOV.UK rates page
Basic rate band used for stacking	£37,700 for 2026 to 2027	GOV.UK rates page
Trustees and personal representatives	24% from 6 April 2026	GOV.UK rates page

The gain is added on top of your other taxable income to decide how much falls into the 18% slice and how much into the 24% slice. The first £3,000 of gains in the year is covered by the allowance.

Part 5 of 7

Four worked examples

We computed these with our own CGT code and checked the arithmetic by hand. All four assume a second property bought for £200,000 with £6,000 of buying costs and sold with £4,000 of selling costs. The prices and incomes are illustrations, not typical values.

Scenario	Gain	Taxable after allowance	Tax at 18% / 24%
A: sold for £230,000, other income £30,000	£20,000	£17,000	£3,060 (all at 18%)
B: sold for £230,000, other income £80,000	£20,000	£17,000	£4,080 (all at 24%)
C: sold for £300,000, £10,000 of improvements, other income £30,000	£80,000	£77,000	£17,264 (£3,649 at 18%, £13,615 at 24%)
D: sold for £300,000, £10,000 of improvements, other income £80,000	£80,000	£77,000	£18,480 (all at 24%)

In scenario A the gain is £230,000 minus £200,000 minus £6,000 minus £4,000, which is £20,000. After the £3,000 allowance, £17,000 is taxed at 18%. Scenario C shows the stacking effect: only part of the gain fits in the basic band, and the rest is taxed at 24%. Our calculator uses simplified income tax constants, so your own figure may differ. These are estimates, not tax calculations.

Part 6 of 7

The 60 day rule

GOV.UK says you must report and pay CGT on most sales of UK property within 60 days. For UK residents selling residential property, the page says the 60 days run from completing the sale. It adds that you may have to pay interest and a penalty if you do not report and pay on time. You report through a Capital Gains Tax on UK property account, or by post if you cannot use the online service. GOV.UK says you do not need to report your gains online if your total gains are less than the tax-free allowance. Non-UK residents must report sales even when no tax is due.

Part 7 of 7

Before you sell

Gather the purchase price and the receipts for buying costs and improvements.
Check whether private residence relief covers any of the period you lived there.
Estimate the gain and the tax with our Capital Gains Tax calculator, then put the 60 day date in your diary.
If the property is inherited, read our guide to selling an inherited property, because the starting value is different.
Landlords weighing a sale against keeping the property can use the landlord keep or sell tool.

For what else a sale costs, see our guide to the cost of selling a house.

Our take

Work out the gain before you choose how to sell

The tax is charged on the gain, not the sale price, and most UK property sales must be reported and paid within 60 days. In our view the common mistake is to compare offers without knowing what the tax will take, so work out the gain first and keep the dates in view.

Your Property Check helps with the comparison. Our free sale method comparison puts auction, estate agent and cash buyer side by side on net proceeds and timescale, so you can see what each route leaves you with before you decide.

Compare sale routes

Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

Do you pay capital gains tax when you sell your house?

Usually not on your main home, which is normally covered by private residence relief. GOV.UK says you may pay on property that is not your home, such as a buy-to-let, second home or inherited property.

What is the capital gains tax allowance for 2026 to 2027?

GOV.UK says the annual exempt amount for the 2026 to 2027 tax year is £3,000. Gains up to that amount in the year are not taxed.

What are the capital gains tax rates on property?

GOV.UK says higher and additional rate taxpayers pay 24% on gains from 6 April 2026, and basic rate taxpayers pay 18% up to the basic band, with 24% above it.

When must capital gains tax on a property be paid?

GOV.UK says most UK property sales must be reported and paid within 60 days. For UK residents selling residential property, the 60 days run from completion of the sale.

Can you deduct solicitor and estate agent fees?

Yes. GOV.UK says you can deduct the costs of buying, selling or improving the property from your gain, including estate agents' and solicitors' fees. Normal maintenance such as decorating does not count.

Where this comes from

Sources

Last reviewed 4 November 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.