Selling a rental property or second home is not like selling other assets. The capital gains tax rules are different, the reporting deadline is much tighter, and the penalty for getting it wrong applies whether you owe a little or a lot. If you have recently completed a sale or are about to, here is what you need to know.
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The 60-day rule
From the date of completion of the sale, you have 60 days to report the gain to HMRC and pay any capital gains tax due. This applies to UK residential property that has not been your only or main residence throughout the period of ownership, covering buy-to-let properties, second homes, holiday lets and any other residential property that does not qualify for full private residence relief. The 60-day reporting obligation was introduced in April 2020 (initially as a 30-day window, extended to 60 days from 27 October 2021) and applies to all completions since that date. This is separate from your annual Self Assessment return and must be made regardless of whether you are already registered for Self Assessment.
The tax rates for 2026/27
Capital gains on UK residential property are taxed at 18% where the gain falls within the basic rate band, and at 24% above that. The threshold for the basic rate band in 2026/27 is £37,700 of income and gains combined. These rates now match those for other capital gains following changes made at the 2024 Autumn Budget.
What you need to report
- Address and postcode of the property
- Date of acquisition and original purchase price (or market value if inherited or gifted)
- Date of exchange and date of completion
- Sale price
- Costs of acquisition and disposal including solicitor fees, estate agent fees and stamp duty paid on purchase
- Cost of any capital improvements made during ownership (not routine maintenance)
- Details of any reliefs or exemptions being claimed
Where the property is jointly owned, each owner must report their own share of the gain separately.
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How to report
Use HMRC’s dedicated residential property capital gains tax service on Gov.uk. You will need to create a Capital Gains Tax on UK property account if you do not already have one. Payment is made through the same online account. Quote your 14-character CGT payment reference when paying by bank transfer.
What happens if you miss the deadline?
HMRC charges interest on late payments from day 61 onwards. Penalties apply for late reporting and increase the longer the delay. There is no minimum threshold. The penalty applies whether you owe £500 or £50,000. The 60-day payment is your best estimate based on what you know at the time. The full position is confirmed in your annual Self Assessment return, which takes into account all gains and losses for the tax year.
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