Answers · UK 2025/26
Do I pay capital gains tax if I sell a home I used to live in but now rent out?
You get Private Residence Relief for the years it was your main home plus the final 9 months, but the rented period is taxable. After the GBP 3,000 exemption, the taxable slice is taxed at 18% or 24%. The calculation is time-apportioned across ownership.
Full answer
When you sell a property that was once your main residence but later let out, Private Residence Relief (PRR) exempts the gain for the period you lived there, plus the final 9 months of ownership regardless of occupation. The remaining period is chargeable. The taxable gain, after the GBP 3,000 annual exempt amount, is taxed at 18% within your basic-rate band and 24% above it for 2026/27. Worked example: you owned a home for 10 years (120 months), lived in it for 6 years (72 months), then let it for 4 years (48 months), and the total gain is GBP 80,000. PRR covers 72 months plus the final 9 months = 81 months, so 81/120 of the gain is exempt = GBP 54,000. The chargeable gain is GBP 26,000. Deduct the GBP 3,000 exemption to leave GBP 23,000. A higher-rate taxpayer pays 24% = GBP 5,520. Lettings Relief is now only available where you shared occupancy with the tenant. Residential gains must be reported and paid within 60 days of completion. Use the capital-gains-tax calculator to apportion your gain, and check PRR rules and the 60-day deadline on gov.uk.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.