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How much is the Capital Gains Tax on property?

  • 2 min read
  • Last updated 5 Mar 2021

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:

Your situation

Outlined number oneOutlined number one
How did you make money?
Profit from capital gains
Annual salary
?
Other income
?

Tax and profit

Outlined number two
  • Your profit from
    shares
    £20,000
    Incl. £12,300 tax-free CGT allowance
    ?
  • Capital Gains Tax to pay
    £1,413
  • Profit after tax
    £18,587

How your capital gains tax is calculated

Your total capital gains tax (CGT) owed depends on two main components:

  1. How much you earn in total
  2. 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 £12,300 that you make

You pay £127 at 10% tax rate for the next £1,270 of your capital gains

You pay £1,286 at 20% tax rate on the remaining £6,430 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 £12,300 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
  • 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.
  • 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 £12,300 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 had two options:

However, starting from April 2020, all UK tax residents who sell property for a profit (except, of course, your home) have to use only the Real Time Capital Gains Tax Service.

How the real time service works:

  • 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.

This means that 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 £50,270), or if you have another reason to file a tax return (for example, self-employment income).

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