Property Capital Gains Tax Calculator: How to Work Out CGT on a Rental Sale

A property capital gains tax calculator is only as good as the figures you feed it, and the figures landlords get wrong are nearly always the same three: which acquisition costs count, what separates a deductible improvement from a non-deductible repair, and whether the gain is taxed at 18% or 24%. Get those right and the arithmetic is simple. This guide walks through the calculation HMRC actually applies when you sell a rental property in 2026/27, with a full worked example, the deadlines that catch people out, and the points where a calculator stops being reliable.

How capital gains tax on property is calculated

The taxable gain is your sale proceeds less your base cost, less qualifying improvements, less costs of sale, less your annual exempt amount. Tax is then charged on what remains. The residential rates for 2026/27 are 18% on the part of the gain that sits within your remaining basic-rate band and 24% on the part above it, under the unified rates in section 1H of the Taxation of Chargeable Gains Act 1992, as amended by Finance (No. 2) Act 2024 and Finance Act 2025. These rates are not devolved, so they apply identically across England, Wales, Scotland and Northern Ireland. Our guide to 2026 rates and allowances sets out the bands in more detail.

The annual exempt amount is £3,000 per person for 2026/27. That is a steep fall from £6,000 in 2023/24 and £12,300 the year before, which is why gains that would once have been sheltered now produce a real bill. We explain the mechanics in our note on the £3,000 annual exempt amount.

Element	Treatment in the calculation
Sale proceeds (or market value on a gift/connected-party sale)	Starting figure
Original purchase price	Deduct
Acquisition costs: SDLT/LBTT/LTT, legal and survey fees	Deduct
Capital improvements still present at sale	Deduct
Costs of sale: agent commission, conveyancing, EPC	Deduct
Annual exempt amount (£3,000 for 2026/27)	Deduct
Taxable gain	Taxed at 18% within basic-rate band, 24% above

Which costs you can deduct, and which you cannot

The single biggest source of error in any property CGT calculation is mixing up capital and revenue costs. Capital costs change the gain; revenue costs do not, because you set them against rental income instead.

Acquisition costs that reduce the gain

• The original purchase price
• SDLT, or LBTT in Scotland, or LTT in Wales, paid when you bought
• Conveyancing and legal fees on purchase
• Survey and valuation fees on purchase

Improvements that reduce the gain

Qualifying enhancement expenditure must add to the property and still be reflected in it at the date of sale. An extension, a loft or garage conversion, a first-time central heating installation or a structural reconfiguration all count. The test, and the records HMRC expects, are covered in our guide to enhancement expenditure.

Costs that do not reduce the gain

• Mortgage interest and arrangement fees (these are revenue costs of letting, restricted to a basic-rate tax reduction under Section 24)
• Repairs, redecoration and like-for-like replacements (revenue costs set against rent)
• Any cost you have already claimed against rental income (it cannot be counted twice)

A new kitchen illustrates the line well. Replacing a worn-out kitchen with a modern equivalent is a repair and goes against rental income. Adding a kitchen where there was none, as part of an extension, is capital and reduces the gain.

Worked example: selling a buy-to-let in 2026/27

Priya, a higher-rate taxpayer, bought a rental flat for £220,000 in 2017. She paid £9,200 in SDLT including the higher-rate surcharge and £1,800 in legal and survey fees. In 2020 she added a single-storey extension costing £30,000. She sells in 2026/27 for £340,000, paying £6,800 in agent commission and £1,500 in conveyancing.

Line	Amount
Sale proceeds	£340,000
Less purchase price	(£220,000)
Less acquisition costs (SDLT, legal, survey)	(£11,000)
Less capital improvement (extension)	(£30,000)
Less costs of sale (agent, conveyancing)	(£8,300)
Gain before allowance	£70,700
Less annual exempt amount	(£3,000)
Taxable gain	£67,700

Priya has no unused basic-rate band, so the whole taxable gain is charged at 24%, giving CGT of £16,248. Had she owned the flat jointly with a basic-rate-taxpayer spouse, the picture changes materially: each would use a £3,000 allowance, and the spouse's slice would partly fall in the basic-rate band at 18%. That contrast is exactly why ownership structure is worth checking before a sale, not after.

Joint ownership and spousal transfers before sale

Transfers between spouses and civil partners who live together happen on a no gain, no loss basis, so moving a share of a property to a lower-rate partner shortly before sale is not itself a taxable event. Done correctly, it lets a couple use two annual exempt amounts and two sets of rate bands, which can move part of the gain from 24% down to 18%. The transfer must be a genuine beneficial transfer, not a paper exercise, and timing matters. We set out the mechanics and the traps in our guide to transferring property to a spouse.

Private residence relief: where a calculator stops working

If you ever lived in the property as your only or main home, part of the gain may be exempt under private residence relief, with the final nine months of ownership always treated as qualifying. A standard calculator will not handle a property that was your home for part of the period and let for the rest, because the gain has to be time-apportioned. This is one of the most valuable reliefs available to former owner-occupier landlords and one of the easiest to miscalculate. Our guide to private residence relief for landlords walks through the apportionment.

The 60-day reporting deadline

For UK residential property disposals that produce a taxable gain, you must file a standalone CGT on UK property return and pay the estimated tax within 60 days of completion, not exchange. Completion is the trigger, so a long gap between exchange and completion does not extend the clock from exchange. Missing the deadline brings automatic penalties and interest. If you also complete a self assessment return for the year, the disposal is reported there as well and the 60-day payment is credited against the final figure. The detail, including how to amend an estimate, sits in our guide to CGT payment deadlines on property sales.

The points a calculator cannot model

A calculator handles a clean disposal well. It does not handle the situations below, each of which changes either the chargeable amount or the rate, and each of which is where professional input earns its keep:

• Property held through a limited company, where the gain is taxed within corporation tax, not personal CGT, and incorporation relief may apply
• A transfer to your own company, which is a disposal at market value and can trigger a dry tax charge plus SDLT
• Mixed-use property, part residential and part commercial, where rates and reliefs split
• Inherited property, where the base cost is the probate value, not what the deceased paid
• Former furnished holiday lets, now taxed as ordinary residential property since the regime was abolished on 6 April 2025
• Sales to connected parties or at below market value, where deemed market value applies

Record-keeping that protects the calculation

Every figure you deduct has to be evidenced if HMRC asks. The completion statement from a purchase made years ago is the document most often lost, and without it a claimed acquisition cost can be refused. Keep the purchase and sale completion statements, the acquisition SDLT or LBTT or LTT calculation, dated invoices for every capital improvement, and the agent and conveyancing bills on sale. For a clean step-by-step run-through of the same arithmetic on a different set of figures, see our step-by-step CGT calculation for a buy-to-let.

Getting the figure right before you sell

The value in working out CGT early is not the estimate itself, it is the decisions it unlocks: whether to bring a spouse onto the title, whether to split disposals across two tax years to use two allowances, and whether any period of occupation opens up private residence relief. Run the numbers before you instruct an agent, not after completion when the levers have closed. For practical ways to bring the bill down, read our guide on reducing CGT on a property disposal, and if your situation involves a company, mixed use or a former home, our specialist property accountants can work through the full position with you.