Capital Gains Tax on a property sale

CGT on property runs on its own rules

Your main home is normally exempt through Private Residence Relief, so this tax belongs to landlords, second-home owners and inheritors who later sell. Rates on residential property gains are 18% within your unused basic-rate band and 24% above it, with the first £3,000 of gains in a year exempt. The gain itself is the sale price minus purchase price, minus buying and selling costs, minus capital improvements, an extension counts, redecorating does not.

The default example, worked

Sell for £350,000 a property bought at £250,000, with £10,000 of purchase costs and £5,000 of selling costs, and the gain is £85,000. After the £3,000 allowance, a £45,000 earner has £5,270 of basic band left taxed at 18%, and the remaining £76,730 at 24%: £19,364, which is 22.8% of the gain. Joint owners each get an allowance and each use their own bands, which typically trims a five-figure bill noticeably, and is one of several reasons ownership structure deserves thought before the sale, when it can still change anything.

The 60-day deadline catches people

UK residential property gains must be reported and the tax paid within 60 days of completion, through HMRC's own property account rather than waiting for Self Assessment. Miss it and penalties accrue on a bill you were always going to pay. Years of main-residence use earn relief that shrinks the gain, the calculator's job is the headline figure, and complex histories deserve an accountant's afternoon. Selling shares instead? Different rates, same allowance: the shares CGT calculator covers it, and the buy-to-let analyser shows what keeping the property earns instead.