Capital Gains Tax on Selling a Second Home in 2026/27

£23,280 to HMRC on a £100,000 gain

Sell a second home in 2026/27 for £300,000 that you bought for £200,000, and as a higher-rate taxpayer you’ll pay £23,280 in capital gains tax — 23.3% of the gain. After the £3,000 annual exempt amount, the remaining £97,000 is taxed at the 24% residential property rate.

Unlike your main home, a second property — a holiday home, a buy-to-let, an inherited house you kept — gets no private residence exemption. The gain is taxable, and since 2020 HMRC expects the money within 60 days of completion, not at the next self-assessment.

How the £23,280 is worked out

The calculation runs in three steps:

1. Gain: £300,000 sale − £200,000 purchase = £100,000
2. Annual exempt amount: £100,000 − £3,000 = £97,000 taxable
3. Rate: higher-rate taxpayer, so the whole £97,000 × 24% = £23,280

Since 30 October 2024, the 18% and 24% CGT rates apply across all asset types, so property no longer carries a separate surcharge — but 24% is still a serious number on a six-figure gain.

Basic-rate taxpayers don’t escape the 24%

Here is the part that surprises second-home sellers: the gain itself counts when working out which rate you pay. Your taxable gain is stacked on top of your income, and only the slice that fits inside your unused basic-rate band gets the 18% rate.

Take the same £100,000 gain with a £30,000 salary. Your income uses £17,430 of the £37,700 basic-rate band, leaving £20,270 unused:

• £20,270 of the gain at 18% = £3,648.60
• The remaining £76,730 at 24% = £18,415.20
• Total: £22,063.80 — an effective 22.1% of the gain

A basic-rate earner pays only £1,216.20 less than a higher-rate earner on the same sale. On large property gains, the 24% rate does most of the work regardless of your salary.

What legitimately reduces the bill

The taxable gain is not simply sale price minus purchase price. You can deduct:

• Buying and selling costs — solicitor and estate agent fees, and the stamp duty you paid when you bought
• Capital improvements — an extension, a loft conversion, a new kitchen where none existed. Repairs, maintenance and mortgage interest don’t count
• Private Residence Relief — if the property was ever your main home, the years you lived there (plus the final 9 months of ownership) are exempt, apportioned over your total ownership period

Jointly owned property splits the gain between owners, and each owner gets their own £3,000 exempt amount and their own band calculation — often worth thousands for couples where one partner pays basic rate.

Capital losses help too. Losses on other assets sold in the same tax year offset your gains before the exempt amount is applied, and unused losses from earlier years can be carried forward if you’ve reported them to HMRC. Timing also matters at the margin: completion dates either side of 6 April fall into different tax years, with a fresh £3,000 allowance — and potentially a different income picture — on the other side.

The 60-day deadline most sellers miss

UK residents selling a residential property with CGT to pay must report and pay within 60 days of completion using HMRC’s property account — a separate filing from self-assessment. Late returns collect an automatic £100 penalty, escalating charges after six months, and interest on the unpaid tax. If you’re selling this year, have your purchase records and improvement receipts ready before completion, not after.

Run your own numbers

The Capital Gains Tax Calculator applies the 2026/27 rates, the £3,000 exempt amount, and the band-stacking rule above to your own purchase price, sale price, and income — for UK property and shares, and US federal CGT too. Official rates and allowances: GOV.UK — CGT rates and allowances.