When you sell a property, the figure that matters isn't just the sale price. It's what you've actually made once the costs of buying, improving and selling have been taken into account. That figure is your profit before tax, or your "gain". For most people selling their own home, there's no tax to pay on it. For second homes, inherited property and buy-to-lets, it's a different story. Here's a simple guide to how it works.
How your profit is worked out
The basic sum is straightforward. Start with the price you sell for, then take away:
What you paid for the property
Costs of buying it, such as solicitor's fees and Stamp Duty
Money spent improving it, such as an extension, loft conversion or new bathroom
Costs of selling it, such as Estate Agent and solicitor's fees
What's left is your gain. Everyday repairs and maintenance, such as redecorating or fixing a boiler, don't usually count. Keeping receipts for any improvement work makes life much easier when the time comes to sell.
Selling your own home
If the property has been your main home for the whole time you've owned it, you won't usually pay any tax on the profit. This is known as Private Residence Relief. Things can be less clear-cut if you have let out part of the property, used part of it only for business, lived elsewhere for a period or have a very large garden or grounds. If any of these apply, it's worth taking advice before you sell.
Second homes, inherited property and buy-to-lets
If you are selling a property that hasn't been your main home, Capital Gains Tax may be due on the profit. For the 2026/27 tax year:
Everyone has a tax-free allowance of £3,000 of gains each year
Gains above that are taxed at 18% or 24%, depending on your income
Property owned jointly means each owner has their own allowance
There's also a tight deadline. Where tax is due on a UK residential property, the sale must be reported to HMRC and the tax paid within 60 days of completion. For landlords, it's worth planning ahead. Selling with tenants in place can sometimes suit both you and a buyer, and we speak regularly with investors looking for tenanted properties. Joe Brookes at our Wakefield office can talk you through the options.
Capital Gains Tax is one of the areas being watched ahead of the Autumn Budget on 28 October, so check the latest position before making any decisions.
Start with an accurate valuation
Whether you are selling your home or an investment property, every calculation starts with a realistic idea of what it will sell for. Our local valuers can give you a free, no-obligation market appraisal based on recent sales evidence in your area. You can then take that figure to your accountant or tax adviser, who can work out what you're likely to make and whether any tax is due. We can't give tax advice, but we can make sure you start with the right numbers.
Thinking of selling? Book your free valuation at richardkendall.co.uk/valuation or telephone our local offices.
This article is for general information only and is not tax advice. Figures are for the 2026/27 tax year and may change.
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