Answers · UK 2025/26

How much Capital Gains Tax will I pay when I sell a second property?

For 2026/27, residential property gains above your £3,000 annual exempt amount are taxed at 18% within your basic rate band and 24% above it, based on your total taxable income plus the gain. You must report and pay the tax within 60 days of completion using HMRC's UK Property account.

Last updated: 1 July 2026Last reviewed: 1 July 2026How we verify

Full answer

Selling a second property, such as a buy-to-let or holiday home that is not your main residence, triggers Capital Gains Tax on the increase in value since you acquired it, with specific residential property rates and a tight reporting deadline. **The annual exempt amount** Everyone gets a £3,000 annual exempt amount for 2026/27, meaning the first £3,000 of total gains across the tax year (from property and other assets combined) is tax-free. **The residential property rates** Gains above the exempt amount are taxed at 18% to the extent they fall within your remaining basic rate band (taking into account your other taxable income for the year), and 24% on any amount above that -- these are HIGHER than the rates for most other assets like shares, reflecting the specific residential property CGT rates. **Worked example** Someone with £30,000 of other taxable income sells a buy-to-let property, realising a gain of £50,000. After the £3,000 exempt amount, £47,000 is taxable. Their remaining basic rate band (£37,700 minus the £30,000 of other income already using some of it, leaving £7,700) is taxed at 18% = £1,386. The remaining £39,300 of gain is taxed at 24% = £9,432. Total CGT due: £10,818. **Allowable deductions** You can deduct the original purchase price, buying and selling costs (such as estate agent and solicitor fees), stamp duty paid on purchase, and the cost of significant capital improvements (not routine maintenance or repairs) from the sale price when calculating your gain. **The 60-day reporting deadline** Unlike most other Capital Gains Tax, gains on UK residential property must be reported and the tax paid within 60 days of completion, using HMRC's dedicated UK Property Account, separately from (though also later reflected in) your Self Assessment return -- missing this 60-day deadline triggers automatic penalties and interest. **Practical tip** Estimate your likely CGT liability BEFORE completion (using the CGT property calculator) so you have funds set aside to pay within the 60-day window, and keep thorough records of purchase costs, improvement costs, and selling costs, since these directly reduce your taxable gain.