Capital gains tax on property is a tax on the profit, not the sale price, made when an individual sells a property that is not their main home. For the 2026/27 tax year, gains are taxed at 18% or 24% after a £3,000 annual exempt amount.

Key Takeaways

• Capital gains tax on property is 18% inside the basic rate band and 24% above it in 2026/27.
• The annual exempt amount is £3,000 per individual for 2026/27.
• UK residents report and pay tax due on UK residential property within 60 days of completion.
• A limited company pays Corporation Tax on property gains, not capital gains tax.
• Business Asset Disposal Relief is 18%, and its lifetime limit falls to £500,000 from 6 April 2027.

How Much Capital Gains Tax on Property Will You Pay in 2026/27?

Capital gains tax on property rates depend on the size of the gain and the taxpayer’s other income. GOV.UK sets the 2026/27 rates at 18% inside the basic rate band and 24% above it, after the £3,000 annual exempt amount. Gains on a business can attract a different rate from other assets, as the same page notes.

The basic rate band is £37,700 of taxable income. Taxable income is income minus the Personal Allowance and other Income Tax reliefs; HM Revenue & Customs (HMRC) stacks the gain on top of it. Higher and additional rate taxpayers pay 24% on the whole gain, and rental or trading profits count as income.

Ensure you review the updated New Tax Year 2026 Rules to avoid falling into hidden tax traps.

Work out the rate in four steps:

1. Calculate your taxable income: income minus the Personal Allowance and other Income Tax reliefs.
2. Add up your taxable gains and deduct the £3,000 annual exempt amount.
3. Add what remains to your taxable income.
4. Charge 18% on the part that falls inside £37,700 and 24% on the rest.

GOV.UK’s published examples show the effect. With taxable income of £20,000 and a £12,600 gain, £9,600 is taxable after the annual exempt amount, all inside the band, so the tax is £1,728. A £52,600 gain on the same income puts £31,900 above the band at 24%, giving £10,842.

These rates apply to individuals, while trustees and personal representatives pay a flat 24% from 6 April 2026. Who owns the property, and what kind it is, decides whether the rates apply at all.

Capital Gains Tax on Property Held in a Limited Company or a Personal Name

Who owns the property, and what it is, decides the tax, the return and the deadline. Individuals pay capital gains tax on both residential and commercial property, at the same 18% and 24% rates. A company pays Corporation Tax on the same gain instead.

Who sells	Property sold	Tax charged	Annual exempt amount	Reported through	Deadline
Individual	UK residential property	Capital gains tax	£3,000	HMRC’s Capital Gains Tax on UK property service	60 days from completion
Individual	Commercial property or land	Capital gains tax	£3,000	Self Assessment return	Tax year after the sale
Limited company	Any UK property	Corporation Tax	None	Company’s Corporation Tax return	Company’s filing deadline

The 60-day route in the first row applies where tax is due. GOV.UK adds that its property calculator cannot be used for sold land or business premises, or by a company, so those gains need separate workings.

For an owner-manager, the practical question is who holds the title before a sale is agreed. Personal ownership brings the £3,000 annual exempt amount and personal rates, while company ownership brings neither.

A residential sale also demands payment within 60 days, whereas a commercial sale is reported in the next tax year, so the cash demand arrives at different times. If your company manages a wide real estate portfolio, understanding how to simplify lease accounting for your business will ensure accurate corporate tax tracking.

Capital Gains Tax on Property Sale: How to Work Out Your Gain

Start with the price you sold for, then subtract what you paid and your allowable costs. Deduct the £3,000 annual exempt amount from the result before applying any rate.

For illustration only: a £300,000 sale, a £200,000 purchase price and £20,000 of allowable costs leave an £80,000 gain, or £77,000 after the annual exempt amount.

• Buying and selling fees: Estate agents’ and solicitors’ fees can be deducted, as GOV.UK lists.
• Stamp duty: Stamp duty land tax paid on purchase counts as a buying cost. For a breakdown of updated brackets, check the latest Master Stamp Duty Rates 2025.
• Improvements: Capital improvement costs, such as an extension, count while they remain reflected in the property.
• Not deductible: Normal maintenance such as decorating, mortgage interest and costs already claimed against rental income.
• Special rules: Leases, part of the land, compulsory purchase and estate property each have their own calculation rules, according to GOV.UK.

GOV.UK replaces the sale price with market value for gifts, other than to a spouse, civil partner or charity, and for sales below market value made to help the buyer.

It does the same for inherited property whose Inheritance Tax value is unknown and for property owned before April 1982.

Be particularly careful in legacy situations; failing to understand the basis of the inherited value can often trigger HMRC inheritance tax warning traps. Jointly owned property is split by share, so each owner calculates the gain on their own portion.

Keep completion statements and improvement invoices for every property, because each deduction needs evidence.

When Do You Pay Capital Gains Tax on Property?

A UK resident must report and pay any capital gains tax due on UK residential property within 60 days of completion. A non-resident must report every UK property disposal in the same window, even when no tax is due. The tax year, however, is fixed by the exchange date.

The deadline applies to completions on or after 27 October 2021, and GOV.UK warns that late reporting or payment can bring interest and a penalty.

Follow this sequence for a UK residential sale:

1. Record the exchange date, because an unconditional contract fixes the date of disposal under section 28 of the Taxation of Chargeable Gains Act 1992.
2. Record the completion date and count 60 calendar days forward; completion on 1 May, for example, gives a deadline of 30 June.
3. Estimate the gain and the tax, using a realistic forecast of this year’s income.
4. File the residential property return and pay through HMRC’s Capital Gains Tax on UK property service before day 60.
5. Repeat the disposal on your Self Assessment return if you file one, because the tax already paid is credited there.

Gains on other assets, including commercial property, follow the slower route. They are reported on a Self Assessment return in the tax year after the sale. Eligible taxpayers may be able to use the “real time” Capital Gains Tax service to report by 31 December in the tax year after the sale.

Diary the 60th day as soon as a completion date is agreed, and ask a tax adviser to prepare the figures early.

How to Avoid Capital Gains Tax on Property Legally

Most sellers can reduce the taxable gain but rarely remove the bill. Full relief mainly comes from Private Residence Relief, which normally exempts a main home, or from total gains below the £3,000 annual exempt amount.

Use these six legal ways to cut the bill before contracts are exchanged:

• Claim every allowable cost. Each £1,000 deducted saves £180 at 18% or £240 at 24%, so a missed £10,000 improvement invoice can cost £2,400.
• Use both partners’ allowances. Transfers to a spouse or civil partner are usually “no gain, no loss” transfers, so shared ownership gives two £3,000 annual exempt amounts.
• Shift gain into the lower band. Transfer a share to a partner with unused basic rate band so more of the gain is taxed at 18%. The transfer must be genuine and complete before exchange.
• Choose the tax year. Sell when taxable income is lower, or spread two disposals across two tax years to use two annual exempt amounts. Every £10,000 of basic rate band freed moves £10,000 of gain from 24% to 18% and saves £600.
• Offset losses. Losses on other assets can reduce the gain once reported to HMRC, so check GOV.UK for the reporting deadline.
• Check Private Residence Relief. If the property was ever your home, relief covers the years you lived there plus the final nine months of ownership.

Gifting a property, or selling it below its worth to help a buyer, does not reduce the gain, because GOV.UK requires market value in both cases. Interest and a penalty for late reporting then add cost on top.

A tax adviser can model these levers against a specific sale, which matters most when business premises or a company are involved.

Business Premises and Business Asset Disposal Relief After the Autumn Budget 2026

Business Asset Disposal Relief is charged at 18%, and its lifetime limit falls from £1 million to £500,000 for qualifying disposals from 6 April 2027. The Autumn Budget 2026 announced the cut on 28 October 2026, as a GOV.UK policy paper confirms.

Legislation will follow in the Finance Bill 2026, and the main 18% and 24% rates are unchanged.

From 6 April 2027, the lifetime limit on gains eligible for Business Asset Disposal Relief falls from £1 million to £500,000. Gains within the limit stay at 18%, and any excess is taxed at the standard rates. The most the relief can save a higher rate taxpayer in a lifetime therefore halves, from £60,000 to £30,000.

Business premises qualify only as an “associated disposal” linked to a qualifying sale of the business. Examples include shares in a personal company or an interest in a partnership. The relief is restricted in some cases, and letting property does not count as a business.

For a higher rate taxpayer with a £1 million qualifying gain, the new limit means £500,000 at 18% and £500,000 at 24%, a bill of £210,000 against £180,000 today. GOV.UK lists sole traders, partnerships and trustees among those who pay the 18% rate on qualifying gains.

• May qualify: Premises owned personally and used by the seller’s company or partnership, sold alongside a qualifying disposal of the business.
• Will not qualify: Investment property let to tenants.

A separate, proposed Founders’ Relief would tax qualifying founders’ share gains at 10% on up to £10 million of lifetime gains from April 2027. It concerns shares, not property, and its consultation closes on 30 November 2026.

Check the disposal date against 6 April 2027 and the two-year qualifying period before planning an exit. Take advice before accelerating a sale, because the relief has conditions.

Second Properties, Buy-to-Let and Jointly Owned Property

GOV.UK’s guide for property that is not a main home lists buy-to-let properties, business premises, land and inherited property as examples. These sales use the same rates, but the reliefs depend on how the property was used.

• Second homes and buy-to-let: Gains are usually taxable, because Private Residence Relief applies only to a property that was at some point the owner’s home.
• Former main homes that were let: Relief covers the years of occupation plus the final nine months of ownership, and the rest of the gain is taxable.
• Jointly owned property: Each owner calculates the gain on their own share and uses their own £3,000 annual exempt amount.
• Spouses and civil partners: Transfers between them are usually free of capital gains tax, and the new owner takes over the original cost.
• Homes partly used for business: No Private Residence Relief applies to a part that was only let or used for business and never lived in.
• Inherited property: The gain counts only growth since the date of death, measured from the property’s value then.
• Former holiday lets: The furnished holiday lettings regime ended on 6 April 2025, so these are treated like other rental property.

Several of these situations can overlap in one sale, and that is where costly misreadings begin.

Common Assumptions That Cost Property Sellers Money

Six common assumptions can change the tax, the return or the timing of a property sale.

Common assumption	What the rules say
Commercial property is taxed at a lower rate.	Individuals pay 18% or 24% on commercial property gains, the same as on residential gains.
Every property sale needs a 60-day return.	The 60-day service covers UK residential property where tax is due.
A company gets the £3,000 annual exempt amount.	The annual exempt amount is an individual allowance, so a company does not receive it.
The £1 million Business Asset Disposal Relief limit is permanent.	The limit falls to £500,000 for qualifying disposals from 6 April 2027.
Living in a property for a year makes the sale tax-free.	Relief depends on the periods the property was the main home, plus the final nine months of ownership.
A property sold at a loss needs no reporting.	A loss follows different reporting rules, so GOV.UK’s guidance should be checked before it is ignored.

Test your own sale against each row before relying on a general guide.

Before You Exchange Contracts: A Seller’s Checklist

Work through these eight checks while the sale is still being negotiated:

1. Confirm who holds the title and whether the property is residential or commercial, using the route table above.
2. Gather the purchase price, buying costs, improvement invoices and dates when the property was a main home.
3. Estimate the gain and the capital gains tax on the property sale, remembering that the exchange date fixes the tax year.
4. Check whether Private Residence Relief, losses or a spouse transfer could reduce the gain.
5. For a business sale, test Business Asset Disposal Relief eligibility against the 6 April 2027 change.
6. Diary when you pay capital gains tax on property: the 60th day after completion. Book the report in advance.
7. Confirm each joint owner’s share, income and annual exempt amount separately.
8. Keep completion statements, invoices and workings together in one file, then ask a tax adviser to review the figures before contracts are exchanged.

Keep these 2026/27 figures to hand when briefing an adviser:

Item	Figure
Rate inside the basic rate band	18%
Rate above the basic rate band	24%
Annual exempt amount	£3,000
Basic rate band	£37,700
Residential reporting deadline	60 days from completion
Business Asset Disposal Relief rate	18%
Business Asset Disposal Relief limit from 6 April 2027	£500,000

Conclusion

Capital gains tax on property depends on who sells, what is sold and when contracts are exchanged. For 2026/27, the rates are 18% and 24%, and the annual exempt amount is £3,000.

UK residential sales need a 60-day report. Business owners should check ownership, premises and Business Asset Disposal Relief before exchange, while the April 2027 change is still ahead.

FAQs

What are the capital gains tax rates on property for 2026/27?

The rates are 18% for gains inside the basic rate band and 24% above it, with a £3,000 annual exempt amount for individuals. Business Asset Disposal Relief gains are charged at 18%. The Autumn Budget 2026 left the main rates unchanged and changed only that relief’s lifetime limit from April 2027.

How do you avoid capital gains tax on property?

You can usually reduce the tax but rarely avoid it entirely. Deduct every allowable cost, share ownership genuinely with a spouse or civil partner, offset losses, choose the tax year and check Private Residence Relief. A total gain below your £3,000 annual exempt amount produces no tax.

Do you pay capital gains tax on commercial property?

Yes. Individuals pay capital gains tax at 18% or 24% on commercial property gains, and report them through Self Assessment rather than the 60-day service. A company selling the same premises pays Corporation Tax instead.

Do you have to report a property sale if no capital gains tax is due?

A UK resident does not need to report online when total gains are below the annual exempt amount, according to GOV.UK. A non-resident must report every UK property disposal within 60 days, even with no tax due.

Does a limited company pay capital gains tax on property?

No. A limited company pays Corporation Tax on the chargeable gain and does not receive the £3,000 annual exempt amount. The sale is reported in the company’s Corporation Tax return, not through HMRC’s Capital Gains Tax on UK property service.

Tax rules and thresholds change, and entitlement depends on individual circumstances. Figures reflect GOV.UK and HMRC guidance published as of 5 November 2026; confirm current rules with HMRC or a qualified tax adviser before making a decision.