CGT on a second property
Capital Gains Tax on a second property in 2026/27 is 18% on gains within your basic rate band and 24% above it, after deducting a £3,000 annual exempt amount, under HMRC's Capital Gains Tax rates for residential property. This calculator estimates the exact split from the sale price, costs and income you enter.
60-day rule: you must report the sale and pay the estimated CGT within 60 days of completion, through an HMRC Capital Gains Tax on UK property account.
How is CGT calculated on a second property?
The taxable gain starts with the sale price minus what was paid for the property, minus allowable costs. Allowable costs include agent and solicitor fees, the stamp duty paid on purchase, and money spent on improvements. The first £3,000 of the remaining gain is tax-free, under the annual exempt amount described on gov.uk's Capital Gains Tax rates page.
The taxable gain is then added on top of taxable income to fix the rate. Any part that still fits inside the unused basic rate band is taxed at 18%. Everything above that band is taxed at 24%, as set out in HMRC's residential property Capital Gains Tax rates. A higher income leaves less room in the basic rate band, so more of the gain falls at the higher rate. HMRC's own calculator needs a government gateway login, so this page gives an estimate first.
What would I pay on an example sale?
Selling a buy-to-let for £320,000 that cost £250,000, with £6,000 of fees and improvements, gives a gain of £64,000. Taking off the £3,000 allowance leaves a taxable gain of £61,000. On a £40,000 income, £10,270 of the gain fits the basic rate band at 18%. The remaining £50,730 is taxed at 24%, giving an estimated Capital Gains Tax bill of £14,024. That amount must be reported and paid within 60 days of completion, under HMRC's rules for Capital Gains Tax on UK property.
Common questions
What are the CGT rates on a second property in 2026/27?
Residential property gains above the £3,000 allowance are taxed at 18% for the part that fits in your basic-rate band and 24% for the part above it. Where the gain sits depends on your income.
How does my income change the CGT I pay?
The taxable gain is added on top of your income. If your income has not used up the basic-rate band, part of the gain is taxed at 18%. Once the band is full, the rest is taxed at 24%. A higher salary means more of the gain falls in the 24% band.
When do I have to report and pay CGT on a property?
Within 60 days of completion. You report the sale and pay the estimated CGT through a Capital Gains Tax on UK property account, separately from your normal Self Assessment. Missing the 60-day deadline brings penalties and interest.
What can I deduct from the gain?
Buying and selling costs such as estate agent and solicitor fees, stamp duty you paid on purchase, and the cost of improvements like an extension. Normal maintenance and mortgage interest do not count. Deducting these first lowers the gain before the £3,000 allowance.
Do I pay CGT when I sell my own home?
Usually not. Your main home is covered by Private Residence Relief. CGT bites on a second home, a buy-to-let, or a property that was your home for only part of the time you owned it, where only part of the gain is relieved.
How is CGT calculated on a second property?
Take the sale price, subtract what was paid for the property, then subtract allowable costs such as agent and solicitor fees, stamp duty paid on purchase and improvements. The first £3,000 of the remaining gain is tax-free under the annual exempt amount. The rest is taxed at 18% within the basic rate band and 24% above it, following the rates set out on gov.uk.
What would I pay on an example sale?
On a £320,000 sale that cost £250,000, with £6,000 of costs, the gain is £64,000. After the £3,000 allowance, £61,000 is taxable. With a £40,000 income, part is taxed at 18% and the rest at 24%, giving an estimated Capital Gains Tax bill of £14,024.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.