Capital Gains Tax on Selling a Buy-to-Let Property — 2025/26 Guide for UK Landlords

Why CGT Is Critical for Landlords

Selling a rental property can trigger one of the biggest tax bills a landlord will face — Capital Gains Tax (CGT). Since April 2020, landlords have been required to report and pay CGT within 60 days of completion, making timing and reporting crucial.

From 6 April 2025, both rates and reliefs have been updated, meaning landlords must carefully calculate gains, understand which reliefs apply, and avoid missing HMRC deadlines.

This guide explains the CGT rules for buy-to-let sales in 2025/26, including rates, the annual exempt amount, and the 60-day online reporting system.

Current CGT Rates for Residential Property (from 6 Apr 2025)

• Basic rate taxpayers: 18% on chargeable gains within the basic rate band.

• Higher and additional rate taxpayers: 24% on chargeable gains above the basic rate band.

• Annual Exempt Amount (AEA): £3,000 per individual (£1,500 for most trusts).

Unlike the sale of shares or other assets, residential property attracts higher CGT rates.

The 60-Day Reporting & Payment Rule

• Since April 2020, UK residents must:

  
  

  • Report gains on UK residential property via HMRC’s CGT on UK Property online service.

  • Pay the CGT within 60 days of completion.

  
  

• Non-residents must report all UK property disposals, even if no CGT is due.

Failure to meet this deadline leads to:

• Late filing penalties.

• Daily penalties for continued failure.

• Interest on unpaid tax.

Reliefs That May Reduce the Gain

• Private Residence Relief (PRR): Applies if the property was your only or main home for part of ownership.

• Lettings Relief: Only applies in limited cases where PRR applies and the landlord lived in the property while letting part of it.

• Costs deductible from gains:

  
  

  • Legal fees and estate agent fees.

  • Stamp Duty Land Tax originally paid.

  • Capital improvements (but not routine repairs).

Common Pitfalls for Landlords

• Forgetting to factor in the reduced Annual Exempt Amount (£3,000 from 2025/26).

• Assuming mortgage repayments are deductible (they are not).

• Confusing repairs (deductible as income expenses) with improvements (deductible for CGT).

• Missing the 60-day deadline and triggering automatic HMRC fines.

How Wexley Protects Landlords from CGT Shocks

At Wexley & Associates, we guide landlords through:

• Accurately calculating chargeable gains.

• Applying PRR, lettings relief, and allowable deductions.

• Filing within 60 days to avoid penalties.

• Planning disposals tax-efficiently across multiple years.

Our proactive tax planning ensures landlords don’t lose more of their sale proceeds to HMRC than necessary.

Call to Action: Plan Your Property Sale Before HMRC Does

Capital Gains Tax on property is complex and unforgiving, especially with the 60-day reporting rule. With expert advice, landlords can sell tax-efficiently and avoid unexpected liabilities.

Contact Wexley & Associates today to structure your property sales correctly and keep more of your gains.

References

• HMRC: Capital Gains Tax rates and allowances

• HMRC: Report and pay Capital Gains Tax on UK property

• HMRC: HS283 Private Residence Relief

• HMRC: HS307 Non-resident Capital Gains Tax

• Related Wex Insider article: Small Landlord Tax Reliefs Explained: Property Allowance & Rent-a-Room Scheme 2025/26