Last updated: 14 October 2026
Do you pay Capital Gains Tax when selling your home?
Usually not. If the property has been your only or main home for the whole time you’ve owned it, private residence relief removes the whole gain and you don’t need to report the sale. Tax can arise if you let all or part of it, used part of it only for business, were away for long periods, have a garden and grounds of more than 5,000 square metres (about half a hectare), or bought it mainly to make a profit.
When relief may be restricted
| Situation | Effect |
| Home lived in throughout ownership | Full relief |
| Lived in it, then moved out and let it | Relief for years of occupation plus the final 9 months |
| Room let to a lodger, sharing the home | Usually still full relief |
| Part of the home used only for business | No relief on that part |
| Two homes at once | Relief on the one you nominate, within 2 years of buying the second |
| Grounds over 0.5 hectare | Relief only on land needed for reasonable enjoyment |
Permitted absences
Some periods away still count as living there, as long as you lived in the home before and after:
- Up to 3 years for any reason
- Any period working abroad as an employee
- Up to 4 years working elsewhere in the UK
Example
Kate bought a flat in 2012 for £200,000 and lived in it for 8 years. She moved in with her partner in 2020 and let the flat until selling it in 2026 for £320,000. She owned it for 14 years, so her gain of £120,000 is split. Relief covers 8 years plus the final 9 months, 8.75 years in total. The taxable share is 5.25 out of 14, which is £45,000. After her £3,000 exempt amount, she pays CGT at 18% or 24% on £42,000. Lettings relief isn’t available, because she didn’t live there with her tenants.
Reporting
If some of the gain is taxable, report and pay through a UK property account within 60 days of completion. If the whole gain is covered by relief, nothing needs reporting.
Married couples
A married couple or civil partners can only have one main residence between them for relief. If you each owned a home before marrying, you have 2 years from the date of marriage to nominate one.
Divorce and separation
Since April 2023, separating spouses have up to 3 tax years to transfer assets between them with no gain and no loss, and a spouse who leaves the marital home can keep a share of relief when it’s later sold.
Working from home
Using a room partly for work, alongside private use, doesn’t usually restrict relief. A room used exclusively for business, such as a dedicated consulting room, can lose relief on that part.
Frequently asked questions
How long do I have to live in a home for relief?
There’s no minimum, but the occupation must be genuine.
Is a home I bought to renovate and sell covered?
No, that could be trading.
Does relief apply to a property abroad?
Yes, if it’s genuinely your main home, with extra conditions.
Does the gain affect my income tax band?
The gain is added to your income to set the CGT rate.
Related: when your main residence may not be tax-free, CGT after separation and how long to live in a home for relief.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with CGT and private residence relief. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
