Capital Gains Tax on Second Homes and Buy-to-Lets (2026)
Rates, allowances, PRR, letting relief and the 60-day reporting deadline every UK landlord needs to know.
The 2026 headline numbers
- Annual exempt amount: £3,000 per person
- CGT rate on residential property (from 6 April 2024): 18% basic-rate band, 24% higher/additional-rate band
- Reporting and payment: within 60 days of completion via HMRC's online CGT service
- Married couples / civil partners: can transfer ownership between them tax-free before sale to use both allowances and lower-band capacity
How the gain is calculated
Gain = Sale price − (Purchase price + costs of acquisition + capital improvements + costs of sale)
Costs of acquisition: stamp duty, legal fees, survey fees, mortgage arrangement fees (if capital). Capital improvements: new extensions, kitchens, bathrooms that materially improve — not repainting, boiler replacements, or repairs. Costs of sale: agent fees, legal fees, EPC.
Private Residence Relief (PRR)
If the property was ever your only or main home, PRR exempts the period you lived there plus the final 9 months of ownership.
Letting Relief now only applies where the owner shared occupation with the tenant during the letting period — much narrower than pre-2020 rules.
Nominating a main residence (where you own more than one) must be done in writing to HMRC within two years of the change.
The 60-day rule
A residential-property disposal must be reported and any tax paid within 60 days of completion. Missing this triggers a £100 penalty plus interest and further penalties escalating over months.
Report through your Government Gateway account under "Report Capital Gains Tax on UK property".
Practical tax-saving moves
- Transfer part-ownership to a spouse before sale — use two allowances (£6,000 total exempt) and potentially two basic-rate bands.
- Bring capital works evidence together — invoices for improvements over the entire ownership period.
- Time the completion — a 6 April completion falls into the next tax year and delays payment by 12 months (subject to the 60-day rule still applying).
- Offset losses — CGT losses on other assets in the same year, or carried forward.
This is not tax advice for your specific circumstances — always confirm with an accountant.
Frequently asked questions
How much CGT will I pay?
18% or 24% of the gain above your £3,000 allowance, depending on your total income for the year.
Do I have to report within 60 days if there's no tax?
No — if the gain is fully covered by PRR or the allowance, no CGT return is needed. Keep the workings for your records.
Can I offset improvement costs?
Yes — capital improvements only, not repairs. Keep receipts.