Selling a Property in the North East? Don’t Get Caught Out by Capital Gains Tax

CGT is a Key Consideration

With the North East property market remaining strong, more homeowners and landlords are deciding it’s time to sell. But before you sign on the dotted line, there's a key tax to consider: Capital Gains Tax (CGT).

Whether you’re selling a second home, a buy-to-let property, or land, CGT could significantly reduce your profit if you're not properly prepared. Here’s what you need to know—and how to make sure you stay on the right side of HMRC.

What Is Capital Gains Tax?

Capital Gains Tax is charged on the profit you make when selling an asset that’s increased in value. It’s not the amount you sell for—it’s the gain you’ve made.

For property, CGT generally applies when:

• You're selling a second home

• You own a rental or investment property

• The property hasn’t always been your main residence

When Does CGT Not Apply?

You may not have to pay CGT if:

• The property has been your only or main residence for the entire time you’ve owned it (thanks to Private Residence Relief).

• You transfer the property to your spouse or civil partner.

• Your total gains in the tax year are under your CGT annual exemption (£3,000 for individuals in 2025/26).

What Are the Current CGT Rates for Property?

As of the 2025/26 tax year:

18% on gains that fall within your basic rate band

24% on gains that fall within your higher or additional rate band

These rates apply only to residential property gains. Note: CGT must now be reported and paid within 60 days of the sale completion—so timing is key!

Allowable Deductions

To reduce your CGT bill, you can deduct:

• Solicitor and estate agent fees

• Stamp Duty paid on purchase

• Costs of improvement work (e.g. an extension—not general maintenance)

These deductions can significantly lower your taxable gain.

Selling Property Owned by a Limited Company?

Different rules apply—companies pay Corporation Tax on chargeable gains instead of CGT. Rates, allowances, and deductions differ, so tailored advice is essential.

Conclusion

Selling a property can be financially rewarding, but failing to factor in Capital Gains Tax could lead to unexpected and avoidable tax bills. Whether you're a landlord, investor, or just moving on, it’s vital to plan ahead and know your obligations.

💼 We specialise in Capital Gains Tax planning and compliance. If you’re thinking of selling or have already sold a property, get in touch—we’re here to guide you through the process and ensure you keep more of your profit.

👉 Contact us today to speak with a local expert in CGT.