When do I owe CGT if I sell my house? | 2026/27 UK Guide

To determine exactly when do I owe CGT if I sell my house, you must assess your eligibility for Private Residence Relief (PRR), deduct your available tax-free allowance, apply the newly unified 2026/27 tax rates, and adhere to a strict 60-day payment window.

The Core Exemption: Private Residence Relief (PRR)

If the property is your primary home, you generally owe no Capital Gains Tax (CGT). Section 222(1)(a) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) grants relief on a gain accruing to an individual attributable to the disposal of a dwelling-house which has been their “only or main residence”.

If you occupied the property as your main home for the entire duration you owned it, section 223(1) of TCGA 1992 completely exempts the gain from CGT.  Consequently, you do not owe any tax, and you do not even need to report the disposal to HMRC.

The 9-Month Final Period Exemption

Homeowners frequently move out of their property before it finally sells. To prevent you from owing CGT on the period the property sits empty on the market, the legislation offers a “final period exemption”.

Under section 223(1) and 223(2) of TCGA 1992, if the property was your only or main residence at any time during your ownership, the final 9 months of your period of ownership are completely exempt from CGT.  You receive this 9-month exemption automatically, regardless of whether you actually lived in the property during that time or how you used it.

For disabled persons or individuals moving into a care home, section 225E of TCGA 1992 extends this final period exemption to 36 months.

Calculating Your Liability: The £3,000 AEA and 2026/27 Rates

You will owe CGT if you sell a property that was not your main home for your entire period of ownership (ignoring the final 9 months), such as a second home or a buy-to-let investment.

Before applying the tax rates, you must deduct your tax-free allowance. For the 2026/27 tax year, section 1K of TCGA 1992 restricts the Annual Exempt Amount (AEA) to £3,000.  You only pay tax on the remaining gain that exceeds this £3,000 threshold.

If you have a chargeable gain of £20,000 after PRR is applied, you deduct the £3,000 AEA to leave a taxable gain of £17,000.

For disposals in the 2026/27 tax year, section 7 of the Finance Act 2025 fundamentally altered the CGT rates by eliminating the separate “residential property” premium and unifying them with the main rates.  You pay tax based on your UK income tax bracket:

• Basic Rate Taxpayers: You pay 18% on residential gains falling within your unused basic rate band.
• Higher and Additional Rate Taxpayers: You pay 24% on residential gains exceeding the basic rate band.
• Trustees and Personal Representatives: You pay a flat rate of 24%.

The 60-Day Reporting and Payment Deadline

You must strictly observe the deadline for paying the tax. You do not wait until your annual Self Assessment tax return.

UK residents who dispose of a UK residential property and owe CGT must report the disposal and pay the tax via a ‘CGT on UK Property Account’ within 60 days of the completion date.  This acts as a “payment on account” of your final CGT liability.

Crucially, the 60-day clock begins on the date of completion, not the date you exchange contracts.  However, for the purposes of calculating your period of ownership for PRR, the Court of Appeal confirmed in Higgins v HMRC that your ownership period also begins upon completion of the purchase, rather than the exchange of contracts, ensuring typical homeowners receive full relief for the time they actually owned the home.

If PRR covers your entire gain, or if your total gain is less than the £3,000 AEA, your liability is reduced to nil and you do not need to submit a 60-day report.

Non-UK Residents: For completeness, if you are a non-UK resident, you face much stricter rules. Non-UK residents must report all disposals of UK property within 60 days of completion, even if the disposal results in a loss or no tax is due.

Summary of 2026/27 Rules for House Sales

Next steps for research: Assess whether the property features outbuildings or land exceeding the 0.5-hectare “permitted area” under section 222(2) of TCGA 1992, which may require a proportional restriction of Private Residence Relief based on the size and character of the dwelling-house.