- When calculating CGT on a property sale you can deduct buying and selling expenses
- You can offset losses made on other assets
- If you've lived in a rental property you are selling you might be able to reduce the chargeable gain
Higher mortgage rates and new regulations such as energy efficiency requirements are encouraging more buy-to-let landlords to consider selling up. Or maybe you just don't want to spend a lot of your retirement managing and maintaining rental properties. But selling a property that isn't your main home also incurs capital gains tax (CGT), and at a higher rate than for the disposal of assets such as funds and shares – 18 per cent for basic rate taxpayers or 28 per cent for higher or additional rate taxpayers, respectively, as opposed to 10 per cent or 20 per cent.
On top of this, the annual CGT allowance of £6,000 – the value of gains you can make tax-free – will fall to £3,000 from the 2024-25 tax year. So if you sell a rental or second property, you should be conscious of how the tax might affect you.