Selling a rental in 2026: the 60-day capital gains tax bill landlords miss
When you sell a let property at a profit, two clocks start ticking. One is the capital gains tax on the gain. The other is a 60-day deadline that most landlords do not know exists until they are already late. Miss it and the penalties and interest start before you have even filed your normal tax return.
You are taxed on the gain, not the sale price
Capital gains tax is charged on your profit, not on what the property sold for. In simple terms the gain is the sale price, minus what you paid for it, minus the costs of buying and selling, minus any money you spent improving it. From that you deduct your annual exempt amount, which is £3,000 for 2026 to 2027, and what is left is taxable.
The costs that reduce the gain add up quickly and are easy to forget: legal fees on both the purchase and the sale, the estate agent's commission, the Stamp Duty you paid when you bought, survey fees, and genuine capital improvements such as an extension or a new kitchen where there was none. Routine repairs do not count here, because you should already have claimed those against your rental income year by year.
The rates: 18% and 24%
Residential property has its own capital gains tax rates, higher than for most other assets. For 2026 to 2027 the rates are 18% on any part of the gain that sits within your remaining basic-rate band, and 24% on everything above it. Where the line falls depends on your other income for the year, because the gain is stacked on top of it.
| Step | Figure |
|---|---|
| Sale price | £250,000 |
| Less purchase price | £180,000 |
| Less buying and selling costs | £8,000 |
| Gain | £62,000 |
| Less annual exempt amount | £3,000 |
| Taxable gain | £59,000 |
Say your other income for the year is £40,000. That leaves £10,270 of your basic-rate band before the £50,270 threshold, so the first £10,270 of the gain is taxed at 18% and the remaining £48,730 at 24%. The bill comes out around £13,545. Change your income, your costs or the ownership split and the number moves a lot, which is why it pays to run your own figures rather than assume a flat rate.
Ways the bill legitimately comes down
Before you accept a headline number, a few things are worth checking. If the property was ever your own main home, Private Residence Relief can shelter part of the gain. If you own it jointly with a spouse or civil partner, you each use your own £3,000 exemption and your own basic-rate band, which can meaningfully cut the total. Timing the completion so a gain falls into a tax year where your income is lower, or spreading a two-property sale across two tax years, can also help. Each of these has conditions, so they are worth confirming for your situation rather than assuming.
One more link worth knowing: if you are selling because the numbers no longer work, the reason is often Section 24, which taxes mortgage interest far more harshly for individuals than for companies.
Selling one, re-letting another?
If you are moving your money into a different property, the new tenancy still needs a compliant set-up under the 2026 rules. Our Complete Landlord Pack builds the agreement, written statement, rent book and notices from a few answers, instantly as PDF and Word. £49, one-off.
See the Complete Pack →Estimate your capital gains tax before you sell
Free tools from our sister firm, LOYALS, a UK accountancy practice that handles property disposals and 60-day returns for landlords.
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Frequently asked questions
Is the deadline from exchange or completion? Completion. You have 60 days from the completion date to report and pay.
What if I sell at a loss? No tax is due, and you can usually carry the loss forward against future gains if you report it.
What if it used to be my home? Private Residence Relief may cover the years it was your main residence plus the final period of ownership. Worth checking carefully.
Do limited companies pay CGT on a sale? No. A company pays Corporation Tax on the gain instead, under different rules and dates.
This guide is general information for landlords in England, not tax or legal advice for your specific circumstances. Rates and reliefs can change at Budgets. Check the current rules on GOV.UK or speak to an accountant before acting.