Work out your gain
You may need to pay tax when you sell your home if you don’t qualify for full Private Residence Relief.
If you have tax to pay you need to work out how much gain you made when you sold your home.
Your gain is usually the difference between what you paid for your home and what you sold it for. Use the market value instead if:
- it was a gift (there are different rules if it was to your spouse, civil partner or a charity)
- you sold it for less than it was worth to help the buyer
- you inherited the asset (and don’t know the Inheritance Tax value)
- you owned it before April 1982
You can deduct costs of buying, selling or improving your property from your gain. These include:
- estate agents’ and solicitors’ fees
- costs of improvement works, for example for an extension - normal maintenance costs like decorating don’t count
You can’t deduct certain costs, like interest on a loan to buy your property. Contact HM Revenue and Customs (HMRC) if you’re not sure whether you can deduct a certain cost.
There are special rules for calculating your gain if you sell a lease or your home is compulsorily purchased.
Work out if you need to pay
You may be able to use the Capital Gains Tax calculator to work out how much tax to pay on your home. You can’t use it if you:
- sold other chargeable assets in the tax year, for example shares
- reduced your share of a property that you still jointly own
- claim any reliefs other than Private Residence Relief or Letting Relief
- are a company, agent, trustee or personal representative