Do I pay Capital Gains Tax when I sell a rental property in the UK?

Yes. Selling a rental property that was never your main home will trigger Capital Gains Tax on any gain you make.

The gain is calculated as: sale price, minus estate agent and solicitor fees, minus the original purchase price and buying costs, minus any capital improvements made during your ownership.

The first £3,000 of your gain is tax-free (the 2025/26 annual exempt amount). The rest is taxed at 18% if you're a basic-rate taxpayer, or 24% if you're a higher-rate taxpayer.

If the property was at some point your main home before you rented it out, part of the gain may be covered by Private Residence Relief, which could reduce your bill. This is one of the most commonly missed reliefs on rental property sales.

You must report the sale and pay the tax within 60 days of completion. This is a legal requirement and missing the deadline results in automatic HMRC penalties.

We handle rental property CGT returns regularly. Fill in our CGT form to get started, or message us on live chat.