Capital gains tax on a buy-to-let sale is charged at 18% on gains within your basic rate band and 24% above it, after a £3,000 tax-free allowance for 2026 to 2027. GOV.UK says UK residents must report and pay within 60 days of completing the sale.
How is the gain on a buy-to-let worked out?
The gain on a buy-to-let is usually the sale price minus what you paid for the property, less allowable buying, selling and improvement costs.
Working out the gain
- Start with the sale priceUse market value instead if you sold below value to help the buyer.
- Subtract the purchase priceOr market value for gifts, some inheritances and pre-1982 ownership.
- Deduct allowable costsAgent and solicitor fees, stamp duty and improvement works.
- Take your shareJoint owners work out the gain on their own share.
- Deduct the allowance£3,000 for 2026 to 2027, then apply 18% or 24%.
Market value replaces the purchase price in some cases: a property you were given, one you inherited without a known Inheritance Tax value, or one owned before April 1982. If you own the property jointly, you work out the gain only on your own share.
Which costs can you deduct?
Allowable costs for a buy-to-let sale include estate agent and solicitor fees for buying and selling, improvement works such as an extension, and Stamp Duty Land Tax paid on the purchase.
What you can and cannot deduct
| Allowable cost? | |
|---|---|
| Estate agent and solicitor fees | Yes |
| Stamp Duty Land Tax | Yes |
| Improvements, such as an extension | Yes |
| Valuation and advertising fees | Yes |
| Decorating and normal repairs | No |
| Mortgage interest | No |
Normal maintenance, such as decorating, does not count, and GOV.UK says interest on a loan used to buy the asset is not deductible either. The extra stamp duty on second homes therefore reduces the gain, which is one more reason to keep the completion statement: see our guide to the stamp duty surcharge on buy-to-let.
What rate of capital gains tax applies?
Capital gains tax on property gains from 6 April 2026 is 18% for the part that fits in the basic rate band and 24% for the rest, per GOV.UK.
Capital gains tax rates on gains from 6 April 2026
The gain is added on top of your taxable income to decide which rate applies, so a large gain can fall mostly in the 24% rate even for a basic rate taxpayer. Mortgage interest relief is a separate income tax matter, explained in our page on Section 24.
When must you report and pay?
A UK resident selling a buy-to-let must report and pay any capital gains tax due within 60 days of completion, the date ownership passed to the buyer.
If your total gains are below the tax-free allowance, you do not need to report online. If you are registered for Self Assessment, you must also include the sale in your tax return. Non-residents must report every sale of UK property, even with no tax to pay. Late reporting or payment can bring interest and a penalty.
Which records should you keep?
A landlord selling a buy-to-let needs the purchase and sale completion statements, the stamp duty return and invoices for any improvement works to support the gain calculation.
These documents prove the allowable costs and separate improvements from repairs, which do not count. Gather them before completion: the 60-day window leaves little time to rebuild records after the sale.
Does owning through a company change this?
Owning through a limited company changes the tax picture, so the rules on this page apply to properties you own personally. The trade-offs are covered in our guide to limited company buy-to-let.
This page is general information, not tax advice. For complex cases, HMRC or a qualified adviser can confirm the figures.
FAQs
Can I deduct mortgage interest from the gain?
No. GOV.UK says interest on a loan used to buy the asset is not an allowable cost for capital gains tax.
Do I have to report a sale if the gain is below £3,000?
No, if you are UK resident and your total gains are below the tax-free allowance. Non-residents must report every UK property sale.
Does stamp duty reduce the gain?
Yes. Stamp Duty Land Tax is listed by GOV.UK as an allowable cost of buying.
Is the deadline 60 days from exchange?
No. The 60 days run from completion, the date you stopped owning the property.
Keep every purchase, sale and improvement invoice, work out the gain on your share, and report and pay within 60 days of completion.
References
- Capital Gains Tax: what you pay it on, rates and allowances — GOV.UK: 18% and 24% from 6 April 2026, £3,000 allowance for 2026 to 2027.
- Report and pay Capital Gains Tax if you sold a UK property — GOV.UK: 60 days from completion, Self Assessment, penalties.
- Tax when you sell property: work out your gain — GOV.UK: deductible fees and improvements, market value, joint ownership.
- Capital Gains Tax for business: work out your gain — GOV.UK: Stamp Duty Land Tax allowable, loan interest not.
