Capital Gains Tax When Selling a Buy-to-Let: 2026/27 Guide

Selling a rental property in 2026/27: how CGT is calculated, the 60-day reporting rule, the reliefs that still apply, and the five ways landlords legitimately reduce the bill.

Selling a buy-to-let is one of the few moments in a landlord's finances where getting the sequence wrong can cost tens of thousands. Capital gains tax rates, allowances, the 60-day reporting window and the reliefs you can claim all interact — and some choices made before completion cannot be undone after.

The headline rates

For disposals in the 2026/27 tax year:

• 18% on the gain within your basic-rate band of total income.
• 24% on the gain above the basic-rate threshold.
• Annual exempt amount: £3,000 per person. (Was £12,300 as recently as 2022/23 — the reduction has made CGT a much larger bill for landlords selling in 2026.)

A jointly-owned property gets two annual exemptions, which doubles the shelter to £6,000.

How the gain is calculated

The gain is sale price minus purchase cost minus allowable deductions, not just sale price minus purchase price. The deductions that reduce it:

• Stamp Duty Land Tax paid when you bought it.
• Solicitor and surveyor fees on purchase.
• Solicitor fees and estate agent commission on sale.
• Capital improvements during ownership — extensions, loft conversions, replacement kitchens of a higher spec than the original, significant structural work. These improve the property.

What is not allowable: repairs, mortgage interest, insurance, letting agent fees during ownership. These were (or should have been) claimed against rental income on your self-assessment at the time.

The 60-day reporting rule

Since October 2021, UK residents selling UK residential property have had to report the disposal and pay the tax within 60 days of completion. Not the end of the tax year. Not the following 31 January. 60 days from completion.

Report via HMRC's online CGT on UK Property service. The penalty for missing the deadline is £100 after one day, then £300 or 5% of the tax after six months, then another £300 or 5% after twelve. These are automatic.

The 60-day return is a provisional calculation. You still include the disposal on your annual Self Assessment, which reconciles against the 60-day payment and refunds any overpayment.

Private Residence Relief

If the property was your main home at any point, part of the gain is tax-free. The relief covers the proportion of the ownership period you lived there as your main residence, plus the final nine months of ownership whether you were living there or not.

Example: owned for 10 years. Lived in it for the first 3. Private Residence Relief covers 3 years + 9 months = 3.75 years. That is 37.5% of the gain, exempt. On a £60,000 gain, £22,500 is tax-free before you even apply the £3,000 annual exemption.

Five legitimate ways to reduce the bill

1. Transfer a share to a spouse before sale. Spouses can transfer between themselves without CGT, and jointly-owned property gets two annual exemptions and uses both of their basic-rate bands.
2. Time the sale across tax years. If you can split completion over two 5 April dates, you get two annual exemptions. Rarely practical, occasionally decisive.
3. Offset losses on other assets. Loss on a share sale in the same tax year reduces the taxable gain. Unused losses carry forward.
4. Deduct every improvement cost you can evidence. Dig out old receipts for new kitchens, extensions, replaced windows (if they were an improvement, not like-for-like). Even £5,000 of improvements saves £1,200 at the higher rate.
5. Private Residence Relief if you ever lived in it. Many landlords moved out of their first home and let it rather than sell it. That home still carries PRR for the period they lived there.

What to do before completion

Three weeks before completion, pull together: original SDLT return, original solicitor invoice, every improvement invoice you have, and the current solicitor's estimate of fees. A good accountant can produce the 60-day return in a day given these documents. Without them, the return is likely to overstate the gain, overpay the tax and chase the money back later.

Getting help with this

AJH Accountants handles landlord accounting and property CGT reporting for clients across the UK. We file the return, tell you what you can claim, and deal with HMRC on your behalf, so nothing depends on you remembering a deadline.

See how our landlord accounting and property CGT reporting service works, or send us a quotation request and we will call you back. You can also call the office on 01204 840303.

Originally published at ajhaccountant.co.uk/blog/capital-gains-tax-selling-buy-to-let-uk-2026.