As RICS Regulated Valuers covering London, the South East and Yorkshire, we have years of experience in providing property valuations for capital gains tax purposes, making the process of getting a valuation for capital gains tax purposes one less thing you need to worry about.
If your property is subject to capital gains tax it will need a valuation before a sale or disposal. HMRC and the District Valuer will require a formal valuation of your property following disposal, especially if it is not your principal residence. Aston James can provide a property and house valuation for capital gains tax purposes set out in a professional report for the District Valuer.
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In what circumstances would you need a property valuation for Capital Gains Tax purposes?
In some cases, calculating capital gains tax is merely a matter of calculating the gains from the sale of the property in relation to the purchasing price. However, when one or both of these figures are not available, a capital gains valuation will be necessary to determine the market property value at the corresponding times. This will be the case in a number of contexts, including:
- The property was sold under market value to benefit the buyer
- The property was purchased or inherited before 31st March 1982
- The property is given away or passed onto a family member
- You are selling an inherited property
- You are selling a gifted property
Our RICS chartered surveyors carry out accurate, evidence-valuations that are sure to comply with HMRC standards and avoid unnecessary complications with the District Valuer. To find out more about how Aston James Surveyors can help you navigate Capital Gain Tax, get in touch today.
Who needs to pay Capital Gains Tax?
You will need to pay capital gains tax purposes in the following circumstances:
- The property being disposed of is not your main residence
- The property is your main home but it has been used for business purposes
- The property is very large
- The property has been let out at any point
You may also need a capital gains tax valuation if you have lived in the property for less than two years from purchase. Other circumstances where Capital Gains Tax is levied are where the occupier exercises their right to buy or where there is a transfer of shared ownership, as the market value is established for stamp duty and Non-Domicile assessments.
For capital gains tax purposes, ‘disposing of’ includes selling, trading, and gifting. The purpose of the valuation is to accurately calculate Capital Gains Tax in accordance with Taxation of Chargeable Gains Tax 1992 when a property is disposed of. The increase in property value is subject to tax.
How much Capital Gains Tax will I pay?
Capital Gains Tax (CGT) is applied only to the profit you make on the sale of a property, rather than the full sale amount. To determine the gain, subtract the original purchase price of the property from the sale price.
Certain costs associated with buying and selling can be deducted to reduce your taxable gain, including:
- Broker fees
- Stamp duty
- Solicitors' fees
You can also deduct the costs of any improvements made to the property, such as the cost of an extension. However, routine maintenance and upkeep of the property are not deductible. Mortgage interest is also not deductible in calculating CGT, though it can reduce tax on rental income.
If you incur a loss from selling one property, you can offset that loss against gains from selling another asset, such as another property. These losses can be carried forward indefinitely, which could help reduce your taxable gain in future property sales.
For any taxable gains above the annual tax-free allowance, you will be required to pay Capital Gains Tax.
Do I have to pay Capital Gains Tax when I sell my main home?
In most instances, you won’t need to pay CGT when selling your main residence due to 'Private Residence Relief (PRR).' As long as the property has been your main home at some point during ownership, you are not liable to pay CGT for the time it was your primary residence, plus the last 18 months of ownership, even if you were not living there during that period. Individuals with disabilities or those who move into a care home can extend this relief to the last 36 months.
However, you may still face CGT in certain circumstances, such as if:
- You develop part of your home (e.g., converting it into flats)
- You sell part of your garden and the total plot exceeds half a hectare (1.2 acres)
- You use part of your home exclusively for business purposes
- You rent out all or part of your property (except for renting out a single room while living in the property)
- You moved out of your home more than 18 months ago, such as to live with a partner
- You purchase a property for the sole purpose of renovating and selling it for profit
Frequently Asked Questions
Capital gains tax is based on the value of a property on the date it was acquired. This means that the property market value at that exact time of sale is the basis of how we find the capital gains tax on that property.
In the UK, capital gains tax is based on your tax bracket. If you are a basic-rate taxpayer, you’ll pay 18% capital gains tax. For the 2026/27 tax year, gains are taxed at 18% within your unused basic-rate band and 24% above it, for residential property and most other assets.
If part or all of your home has been let out, a portion of any capital gain from the sale may be taxable. However, if you lived in the property at any point, you might be eligible to claim letting relief, which could reduce your CGT liability.
Letting relief does not apply to buy-to-let landlords who have never lived in their properties.
If you own more than one home, you can nominate one to be your tax-free primary residence. It doesn’t need to be the home you live in most frequently; typically, it’s advisable to nominate the one expected to generate the largest gain when sold. You have a two-year window from when you move into a new home to make this nomination.
While married couples and civil partners can only nominate one main home between them, unmarried couples may each nominate a different property.
It’s important to note that if you purchase a property with the intention of selling it for a profit, you won’t be eligible for CGT relief on that property.
There are currently no age-related exemptions on capital gains tax in the UK. Therefore, retirees and senior citizens are not automatically exempt. The annual exempt amount for 2026/27 is £3,000 per person, so each owner can make £3,000 of gains before Capital Gains Tax is due. UK residential property sales must be reported and the tax paid within 60 days of completion. For a more detailed explanation, read our recent blog post.
