Calculate the Capital Gains Tax due when selling a buy-to-let or second property, factoring in allowances and your income tax band.
What you originally paid for the property
What you sold, or plan to sell, the property for
Stamp duty, legal and agent fees, and any capital improvements
Used to work out how much of the gain falls in the higher rate band
Capital Gains Tax owed
£15,644
This result is an estimate only and does not constitute financial advice.
Net proceeds after tax
£56,356
Sale price minus purchase price, costs and CGT
This result is an estimate only and does not constitute financial advice.
Total gain
£72,000
This result is an estimate only and does not constitute financial advice.
Taxable gain
£69,000
After deducting your annual exempt amount
This result is an estimate only and does not constitute financial advice.
When you sell a buy-to-let or second property for more than you paid for it, the profit is a capital gain, and it's usually taxable. Your gain is the sale price minus the original purchase price and any allowable costs, such as stamp duty, legal fees, estate agent fees and money spent on genuine capital improvements like an extension or loft conversion. Routine maintenance and decorating don't count.
Every individual has an annual exempt amount, currently £3,000, which is deducted from your gain before tax is calculated. Gains within this allowance are tax-free, and it resets each tax year, so it can't be carried forward if unused.
The rate you pay on the taxable gain depends on your income tax band. Basic rate taxpayers pay 18%, while higher and additional-rate taxpayers pay 24%. If the gain pushes your total income over the basic rate threshold, only the portion above that threshold is taxed at the higher rate — the rest is still taxed at 18%, which is what this calculator works out for you.
Unlike selling your main home, which is usually covered by Private Residence Relief, a buy-to-let or second property doesn't normally qualify for this exemption, which is why the tax bill on an investment property sale can be significant.
Usually not. Selling your only or main residence is normally covered by Private Residence Relief, which exempts the whole gain from CGT. This calculator is aimed at properties that don't qualify for that relief, such as buy-to-lets, second homes and inherited property.
You can deduct the costs of buying and selling the property, such as stamp duty, solicitor fees and estate agent commission, along with money spent on capital improvements that add lasting value, like an extension, a new kitchen or a loft conversion. Everyday repairs, maintenance and decorating don't count, since these are treated as running costs rather than improvements.
It's the amount of capital gains you can make each tax year before any CGT is due, currently £3,000 per individual. It applies across all your gains for the year, not just property, and any unused allowance can't be carried forward to the following year.
CGT on residential property is charged at 18% for gains that fall within your basic rate band, and 24% for gains above it. Because the gain is added on top of your other taxable income to work out which band it falls in, a large gain can push part of it into the higher rate even if your regular income is modest.
Speak to a property tax specialist to make sure you're claiming every allowance you're entitled to.