How much is the Capital Gains Tax on property?
If you sell a property for a profit, then you will have to pay Capital Gains Tax (CGT).
How much you actually pay then depends on two things:
- your total taxable income for the year
- how big your profit was from selling the property
Usually, Capital Gains Tax is 10% or 20%, but for properties it’s 18% or 28% of the profit instead.
How much will I pay?
You can simply use this Capital Gains Tax calculator to see what your tax bill could be:
First £12,000 are tax-free.
£1,000 taxed at 10%: £100
£7,000 taxed at 20%: £1,400
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How your capital gains tax is calculated
Your total capital gains tax (CGT) owed depends on two main components:
- How much you earn in total
- What type of assets you sell
Your overall earnings determine how much of your capital gains are taxed at 10% or 20%.
Our capital gains tax rates guide explains this in more detail.
In your case where capital gains from shares were £20,000 and your total annual earnings were £69,000:
Capital gains tax (CGT) breakdown
You pay no CGT on the first £12,000 that you make
You pay £100 at 10% tax rate for the next £1,000 of your capital gains
You pay £1,400 at 20% tax rate on the remaining £7,000 of your capital gains
Are there any tax-free allowances or tax reliefs?
You don’t have to pay Capital Gains Tax on property when:
- you’re selling your main home
- if your profit is less than the £12,000 tax-free Capital Gains allowance
- if you’ve made a capital loss on a buy-to-let property sold in a previous year
If you have let out either part or all of your home for a while, you can also apply for letting relief.
This will be the lowest of:
- the gain you receive from the letting proportion of the home
- or the amount of private residence relief you can claim
- or £40,000.
What costs can I claim?
- the price you bought the property for (of course)
- stamp duty
- any legal costs (solicitors’ or agents’ fees)
- any improvements, refurbishing, extensions, etc.
- but not maintenance, mortgage payments or interest.
What if it’s a jointly owned property?
Simple: if you own the property jointly, you each benefit from the £12,000 Capital Gains allowance.
What if I have more than one home?
You can nominate which one is your home. It doesn’t have to be where you live most of the time.
Married couples and civil partners can have only one main home between them.
Do I pay CGT if I give a property as a gift?
If it has increased in value since you bought it, yes – read more here.
How do I pay CGT if I sell a property?
Until April 2020 you have two options:
- You either file a Self Assessment tax return
- Or use HMRC’s Real Time Capital Gains Tax Service.
If you use the real time service:
- you’ll get a payment reference number instead of a UTR
- you won’t have to file a tax return every year
- but you will need to pay your CGT bill within 30 days.
However, starting from April 2020, all UK tax residents who sell property for a profit (except, of course, your home), will have to use only the Real Time Capital Gains Tax Service.
Also, if you use the real time service, you won’t need to file a Self Assessment unless your income changes significantly during the year (there are different CGT rates if your income is under or over £50,000), or if you have another reason to file a tax return (for example, self-employment income).
Hey there! We really hope this article helped you. Tax matters can be a dreadful topic at times. We know. That's why we started TaxScouts.
A stress-free way to getting your taxes done.
Have a minute? See how it works