Tax when you sell property

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1. What you pay it on

You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) property that’s not your home, for example:

  • buy-to-let properties
  • business premises
  • land
  • inherited property

There are different rules if you:

You’ll need to work out your gain to find out whether you need to pay tax.

This guide is also available in Welsh (Cymraeg).

When you do not pay

You do not usually need to pay tax on gifts to your husband, wife, civil partner or a charity.

You may get tax relief if the property is a business asset.

If the property was occupied by a dependent relative you may not have to pay. Find out more in the guidance on Private Residence Relief.

If you need to pay

You must report and pay any Capital Gains Tax on most sales of UK property within 60 days.

If you’re selling property belonging to the estate of someone who’s died, you’ll need to include this information when reporting the estate to HMRC.

2. Work out your gain

Your gain is usually the difference between what you paid for your property and the amount you got when you sold (or ‘disposed of’) it.

If your combined capital gains are over your allowance for the year you’ll have to report and pay Capital Gains Tax.

Market value

In some situations you should use the market value of the property when working out your gain. Do this if:

Selling in special circumstances

There are special rules for calculating your gain if:

Jointly owned property

If you own property jointly with other people, work out the gain for the share that you own.

Deduct costs

You can deduct costs of buying, selling or improving your property from your gain. These include:

  • estate agents’ and solicitors’ fees
  • costs of improvement works, for example for an extension (normal maintenance costs, such as decorating, do not count)

Reliefs

You may get tax relief if the property was:

Work out if you need to pay

Once you know what your gain on the property is, you can calculate if you need to report and pay Capital Gains Tax.

You cannot use the calculator if you:

  • sold land
  • sold business premises
  • sold other chargeable assets in the tax year, for example shares
  • reduced your share of a property that you still jointly own
  • claim any reliefs other than Private Residence Relief or Letting Relief
  • are a company, agent, trustee or personal representative

Calculate Capital Gains Tax on property

If you have Capital Gains Tax to pay

You must report and pay any Capital Gains Tax on most sales of UK property within 60 days.

Reporting a loss

The rules are different if you need to report a loss.

3. Businesses

You may get tax relief if you sell property that you use for business. This may reduce or delay the amount of Capital Gains Tax you pay.

If the purpose of your business is to buy and sell property (you’re a property developer, for example) you do not pay Capital Gains Tax when you sell a property. Instead, you pay:

There are special rules for limited companies that dispose of a single residential property worth more than £2 million.

4. Selling overseas property

You pay Capital Gains Tax when you ‘dispose of’ overseas property if you’re resident in the UK.

There are special rules if you’re resident in the UK but your permanent home (‘domicile’) is abroad.

You may also have to pay tax in the country you made the gain. If you’re taxed twice, you may be able to claim relief.

If you’re non-resident

Non-residents may have to pay UK tax on overseas property if they return to the UK within 5 years of leaving.