Selling for £275,000 a flat that cost £180,000 leaves a £72,000 gain after costs, and a landlord on a £45,000 salary pays £16,243.80 in capital gains tax in 2026/27.
A landlord on a £45,000 salary who sells a flat they have never lived in, completing in 2026/27
| Sale price | £275,000.00 |
| Less estate agent and legal fees on selling | −£4,600.00 |
| Less purchase price | −£180,000.00 |
| Less stamp duty and legal fees on buying | −£3,400.00 |
| Less cost of an extension | −£15,000.00 |
| Gain | £72,000.00 |
| Tax on the gain | |
|---|---|
| Salary, which leaves £32,430 of taxable income | £45,000.00 |
| Taxable gain after the £3,000 annual exempt amount | £69,000.00 |
| Unused basic rate band (£37,700 less £32,430) | £5,270.00 |
| £5,270 at 18% | £948.60 |
| £63,730 at 24% | £15,295.20 |
| Capital gains tax | £16,243.80 |
England. The flat is owned by one person and was always let out. All assumptions and rates
Where a £72,000 gain ends up
Assumptions and rates
- England. The flat is owned by one person and was always let out.
- The £45,000 salary is the only other income, leaving £32,430 of taxable income.
- No other gains in the year and no losses brought forward.
- Annual exempt amount £3,000
- 18% on gains within the unused basic rate band, 24% above it
- Basic rate band £37,700
What can I take off the sale price?
What you paid for the property, the costs of buying and selling it (stamp duty, legal fees, estate agent fees), and the cost of improvements that are still reflected in the property when you sell, such as the extension in the working.
Repairs and running costs you already deducted from rent cannot be used again. Mortgage repayments do not reduce the gain either.
Why does my salary matter?
The gain sits on top of your income to decide the rate. The salary leaves £32,430 of taxable income, so £5,270 of the basic rate band is unused. That much of the gain is taxed at 18% and the rest at 24%. For a higher rate taxpayer the whole £69,000 would be at 24%, which is £16,560.00.
When do I report and pay?
Within 60 days of completion, using HMRC's Capital Gains Tax on UK property account. You then include the sale on your Self Assessment return for the year as well, and any difference is settled there.
Because the 60-day payment is based on an estimate of your income for the year, it can be slightly out. The return corrects it.
What if we own it jointly?
Each owner is taxed on their own share of the gain. Each has their own £3,000 annual exempt amount and their own unused basic rate band, so the total tax is often lower than for a single owner.
Does the tax go into my payments on account?
No. Capital gains tax is left out of payments on account, so selling does not raise the advances you pay for the following year.
What this doesn’t cover
- A property you have lived in as your main home, where Private Residence Relief can apply.
- Property held through a company.
- Selling at a loss, or using losses from other years.
- People who are not UK resident.
- Gifting property, or transfers between spouses.
Common questions
18% on gains within your unused basic rate band and 24% above it, after the £3,000 annual exempt amount.
If you are in Self Assessment, yes. The sale goes on your return for the year too.
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