Capital Gains Tax When You Sell a Rental Property in 2026
RealYield Team
Property Analyst
Selling a buy-to-let is not the end of the tax story. In most cases, it is when the CGT bill arrives.
Capital Gains Tax on a UK residential property disposal does not sit quietly in your annual Self Assessment return. From 6 April 2020, a separate reporting and payment requirement was introduced, initially with a 30-day deadline. Since 27 October 2021, that window has been 60 days. Miss it and HMRC charges an automatic penalty before a single conversation takes place.
Today, 6 April 2026, is also the start of a new tax year, which means updated rates and a changed landscape for anyone considering selling. This guide covers the rates that apply from today, how to calculate your gain correctly, what reduces the bill, and how to meet the 60-day deadline without catching yourself out.
CGT Rates on Residential Property: 2026/27
CGT rates for UK residential property have not changed for 2026/27. They are the same as last year, and have been in place since 6 April 2024, confirmed by GOV.UK.
- Basic rate taxpayer: 18%
- Higher rate or additional rate taxpayer: 24%
These rates apply to gains on residential property above your annual exempt amount (see below). They are different from the CGT rates on shares and other assets, which are 18% and 24% respectively from 2024. For residential property, the distinction that matters is which income tax band the gain falls into. If the taxable gain sits partly in the basic rate band and partly in the higher rate band, the portion in each band is taxed at the corresponding rate.
Annual exempt amount: £3,000
Every individual gets a £3,000 annual exempt amount (AEA) for capital gains. Only the gain above this threshold is taxed. HMRC confirmed in 2024 that the AEA is permanently fixed at £3,000 for individuals from the 2024/25 tax year onwards. It is not index-linked and is not expected to change.
Significantly lower than the £12,300 AEA that applied until 2022/23. If you were relying on a large exempt amount to soften the blow, do not. For most property disposals, the AEA barely touches the bill.
A note on BADR: not relevant to most buy-to-let landlords
Business Asset Disposal Relief (BADR) changes from today: the rate rises from 14% to 18%, confirmed by HMRC's internal manual (CG64174). BADR only applies to qualifying business assets, such as shares in a trading company or a business you have personally run. A passive buy-to-let property does not qualify. If you own your properties through a limited company and you are selling the company itself, not the properties, BADR may be relevant, but that is a specialist area requiring separate advice. For most landlords selling a buy-to-let, BADR does not apply.
The 60-Day Rule: What It Is and Why It Catches People Out
Most landlords get this part wrong. The assumption that CGT on a property sale can wait until the 31 January Self Assessment deadline is incorrect. It is not optional, and HMRC enforces it.
Since 27 October 2021, UK residents selling a UK residential property must report and pay any CGT due within 60 days of the completion date. This is not 60 days from exchange, or from moving out. It is 60 days from when the legal title transfers on completion.
Frequently Asked Questions
What is the CGT rate on a buy-to-let property in 2026?
For the 2026/27 tax year, basic rate taxpayers pay 18% CGT on gains from residential property. Higher rate and additional rate taxpayers pay 24%. These rates apply to any gain above the annual exempt amount of £3,000. The rates are the same as 2025/26 and have been unchanged since 6 April 2024.
How long do I have to pay CGT after selling a rental property?
You must report and pay CGT on a UK residential property disposal within 60 days of the completion date. This is done through HMRC's CGT on UK property account, accessed via Government Gateway. Missing this deadline triggers an automatic £100 penalty and interest on any unpaid tax.
What is the CGT annual exempt amount in 2026/27?
The annual exempt amount (AEA) for 2026/27 is £3,000 for individuals. This has been permanently fixed at £3,000 since the 2024/25 tax year, having been cut from £6,000 the prior year and £12,300 in 2022/23.
Does the 60-day CGT return go through Making Tax Digital?
No. The CGT 60-day return for UK property disposals is a separate standalone service (the CGT on UK property account via Government Gateway). It sits entirely outside Making Tax Digital for Income Tax Self Assessment. Even if you are in scope for MTD from April 2026, your CGT reporting does not change.
What costs can I deduct when calculating my CGT gain on a property?
You can deduct the original purchase price, acquisition costs (legal fees, survey fees, SDLT paid on purchase), selling costs (estate agent fees, legal fees), and enhancement expenditure. Enhancement expenditure means capital improvements that permanently added value to the property and are still visible at the point of sale. Routine repairs and maintenance do not qualify.
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