You may need to pay tax when you sell your home if you do not qualify for full Private Residence Relief . If you have tax to pay you need to work out how much gain you made when you sold your home. Your gain is usually the difference between what you paid for your home and what you sold it for. Use the market value instead if: it was a gift (there are different rules if it was to your spouse, civil partner or a charity ) you sold it for less than it was worth to help the buyer you inherited the asset (and do not know the Inheritance Tax value ) you owned it before April 1982 If you’re not resident in the UK for tax , you only pay tax on gains since 5 April 2015 . Deducting costs You can deduct costs of buying, selling or improving your property from your gain. These include: estate agents’ and solicitors’ fees costs of improvement works, for example for an extension - normal maintenance costs like decorating do not count You cannot deduct certain costs, like interest on a loan to buy your property. Contact HM Revenue and Customs ( HMRC ) if you’re not sure whether you can deduct a certain cost. There are special rules for calculating your gain if you sell a lease or your home is compulsorily purchased. Work out if you need to pay Capital Gains Tax Once you know your gain and have worked out how much tax relief you get , you can calculate if you need to report and pay Capital Gains Tax. You cannot use the calculator if you: sold other chargeable assets in the tax year, for example shares reduced your share of a property that you still jointly own claim any reliefs other than Private Residence Relief or Letting Relief are a company, agent, trustee or personal representative Calculate Capital Gains Tax If you have Capital Gains Tax to pay You must report and pay any Capital Gains Tax on most sales of UK property within 60 days.

Living away from your home

You may get less Private Residence Relief if you live away from your home. However, you always get relief for certain periods. The rules are different if you’re not UK resident for tax . Periods that always qualify for relief No matter how many homes you own or where you lived at the time, you always get relief for the last 9 months before you sold your home. It must have been your only or main residence at some point while you owned it. You’ll also get relief for up to the first 2 years that you owned the home if both the following apply: it was being built, renovated or you could not sell your old home you lived in it as your only or main residence within 2 years of owning it You get relief for these periods even if you nominated a different home as your main home. If you have one home or you nominated your home You get relief if you were away from it for: any reason for periods adding up to 3 years up to 4 years if you had to live away from home in the UK for work any period if you were working outside the UK You must have lived in the home before and afterwards, unless your work prevented you. If you only own one home you get relief for the last 36 months before you sold your home if any of the following apply: you’re disabled you’re in long-term residential care you sold the property before 6 April 2014 You get relief for the last 18 months if none of these apply, but you sold your home before 6 April 2020. If you own more than one home In most cases, you only get relief for one home for any period. You must work out when you lived in each property as your main home. If you’re married or in a civil partnership only one home per couple counts as your main home for any period. If you’ve nominated a home you cannot get relief for another property for the time your home is nominated, apart from for the periods that always qualify for relief. Example You owned your home for 20 years and were away for 5 (25% of the time). The time you lived away was not during the last 9 months or another period that qualified for relief. The amount of gain you get relief on is reduced by 25%. There are other rules that affect tax relief when you sell your home . If you’re not sure how the rules apply to you, call the Capital Gains Tax helpline .

If you nominate a property as your main home you qualify for relief for most of the time you live away . You must have lived in the home as your only or main residence at some point while you owned it. The rules are different if you’re not UK resident for tax . You cannot get relief for another property for the time your home is nominated, apart from for certain periods that always qualify for relief. You can nominate one property as your main home by writing to HM Revenue and Customs ( HMRC ) . Include the address of the home you want to nominate. All the owners of the property must sign the letter. If you want to nominate a home you must do this within 2 years every time your combination of homes changes. If you do not nominate a home and you sell one of your properties you must work out the time you live away . Overseas properties From 6 April 2015, you can only nominate an overseas property if you lived in it for at least 90 days in the tax year.

If you let out your home

You may have to pay Capital Gains Tax if you’ve let out your home to a tenant. You are not considered to be letting out your home if either: you have a lodger who shares living space with you your children or parents live with you and pay you rent or housekeeping How much you pay depends on how long you lived in your home. Work out how much tax you have to pay You’ll pay tax on your ‘chargeable gain’. This is your gain minus any Private Residence Relief you’re eligible for. You get full relief for: the years you lived in the home the last 9 months you owned the home - even if you were not living there at the time If you sold the property between 6 April 2014 and 6 April 2020, you get relief for the last 18 months you owned it. If you only own one home and you’re disabled, in long-term residential care or sold the property before 6 April 2014 you get full relief for the last 36 months you owned it. Example You make a gain of £120,000 when you sell your home, which you owned for 15 years. You lived in the whole property for 7.5 years, then you let it out for 7.5 years. You get Private Residence Relief for the time you lived there (7.5 years). You also get relief for the last 9 months you owned the property, even though you were not living in it. This means you get Private Residence Relief for 8.25 of the years (55% of the time) you owned the property. You get Private Residence Relief on the same proportion (55%) of your gain. This means you will not pay tax on £66,000 of the gain. The remaining 45% (£54,000) of the gain not covered by Private Residence Relief is your chargeable gain. If you only let out part of your home You’ll need to work out what proportion of your home you lived in. You only get Private Residence Relief on this proportion of your gain. Claim Letting Relief If you lived in your home at the same time as your tenants, you may qualify for Letting Relief on gains you make when you sell the property. You can get the lowest of the following: the same amount you got in Private Residence Relief £40,000 the same amount as the chargeable gain you made while letting out part of your home Letting Relief does not cover any proportion of the chargeable gain you make while your home is empty. Example You rent out a large bedroom to a tenant. The bedroom amounts to 10% of your home. You make a chargeable gain of £75,000 when you sell your home. As 10% of your house was let out, you only get private residence relief for £67,500 (90% of the total gain). However, as the remaining gain of £7,500 relates to the bedroom that was rented out you’re also entitled to Letting Relief of £7,500. This means you would pay no tax. There are other rules that may affect the amount of Capital Gains Tax you need to pay. Further help If you’re not sure how the rules apply to you, call the Capital Gains Tax helpline .

Tax when you sell your home

Private Residence Relief

You do not pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

you have one home and you’ve lived in it as your main home for all the time you’ve owned it
you have not let part of it out - this does not include having a lodger
you have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use)
the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
you did not buy it just to make a gain

If all these apply you will automatically get a tax relief called Private Residence Relief and will have no tax to pay. If any of them apply, you may have some tax to pay.

Find out if you’re eligible for Private Residence Relief.

Married couples and civil partners can only count one property as their main home at any one time.

The rules are different if you sell property that’s not your home or if you live abroad.

View a printable version of the whole guide

Tax when you sell your home

Private Residence Relief

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Tax when you sell your home

Private Residence Relief

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