What Capital Gains Tax do I have to pay on my main house in the UK?
Capital Gains Tax (CGT) is tax on the profit that you make when you sell assets that have increased in value since you bought it. The tax only applies to the profit, not the total asset value.
You may have to pay Capital Gains Tax when you sell assets such as:
A second home
A holiday home
A buy-to-let property
Certain investments and shares
What is the Capital Gains Tax allowance in 2025/26 tax year?
Everyone gets an annual Capital Gains Tax allowance each tax year to offset their overall Capital Gains Tax bill. This allowance has significantly decreased in recent years and is now just £3,000 per person in the 2025/26 tax year.
Some people choose to sell parts of assets across multiple tax years in order to make better use of their Capital Gains Tax allowance. This is a complex area, a financial adviser at Borealis Financial Planning can help you to reduce your Capital Gains Tax liability.
Book a no-obligation meeting with a financial adviser
What is Principal Residence Relief (PPR) in the UK?
Principal Private Residence Relief (PPR) is an exemption for Capital Gains Tax on your main property. This means when you sell your primary residence then no capital gains tax would be due provided the property has been your main residence for the entire period that you have owned it and you must have used it as your home.
Do I get Principal Residence Relief if I rented my house out for a few years?
If you rented out part or all of your property, or used part of it exclusively for business purposes, your PPR relief may be restricted.
In these cases:
Only the period you lived in the property as your main home is exempt
Part of the capital gain may be liable to Capital Gains Tax
Calculating this accurately can be tricky, especially if you’ve moved in and out of the property over time. For help calculating your capital gains tax liability, you can book a no-obligation meeting with a financial adviser.
What Capital Gains Tax do I pay if I bought a new home before selling my main home?
The final 9 months of your period of ownership always qualify for Principal Residence Relief, regardless of how you use the property at that time as long as the property had previously been your only or main residence prior to this.
This can be particularly beneficial if you've moved out of the property before selling it, as it extends the period of CGT exemption.
When do I need to report a Capital Gain to HMRC?
You need to complete a Self Assessment tax return and report any Capital Gains due in the capital gains section. It's important to ensure accurate reporting and timely payment to avoid penalties and interest charges.
Seek financial advice
Capital Gains Tax is a complex area and there are many ways you can reduce your capital gains tax liability through careful financial planning.
At Borealis Financial Planning, we can help you to calculate your potential liability and work with you to create a financial plan to reduce your overall tax liability over time.
You can book in a no-obligation meeting to find out your options. Meetings are typically one hour and can be at your home address, at one of our offices or on zoom.
Book a no-obligation meeting with a financial adviser or call us on 0117 456 5921.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
SJP approved 06/02/2026