Selling Property: No SDLT on Sale, But CGT May Apply
Sellers pay no stamp duty — SDLT is exclusively a buyer's tax. However, capital gains tax at 18%/24% may apply, and the 60-day reporting rule catches many sellers off guard.
£0
SDLT for sellers
18%/24%
CGT rates on property
£3,000
CGT annual exempt amount
60 days
CGT reporting deadline
Key Takeaways
- FA 2003 s43(1) confirms SDLT is a buyer's tax — sellers pay no SDLT on the sale of property.
- Capital Gains Tax (CGT) at 18%/24% applies to property gains not covered by Private Residence Relief (TCGA 1992 ss222–226).
- The annual CGT exempt amount is £3,000 for 2025–26 — significantly reduced from £12,300 in 2022–23.
- CGT on residential property gains must be reported and paid within 60 days of completion (since April 2020).
- Selling your previous main residence within 36 months of buying a new one triggers an SDLT surcharge refund opportunity.
- Private Residence Relief covers the entire gain if the property was your only or main home throughout ownership.
- Average estate agent fees are 1–1.8%+VAT of the sale price, making agency fees the largest selling cost after legal fees.
In this article
No SDLT on Sale
Finance Act 2003 s43(1) defines a "land transaction" as "the acquisition of a chargeable interest". Section 43(2) provides that the chargeable consideration is the consideration for the acquisition, paid by the acquirer (buyer). SDLT is therefore structurally a tax on the buyer — the seller has no SDLT obligation whatsoever.
Seller's SDLT Liability: Zero
There is no SDLT on the sale of residential or commercial property. This applies whether you are selling a £100,000 flat or a £10 million estate. Sellers do not file an SDLT return and do not make any SDLT payment. The buyer bears the entire SDLT liability.
This principle is straightforward but worth confirming for buyers who have previously sold property and are unfamiliar with the buyer's tax framework. You can confirm your buyer's tax liability using our stamp duty calculator.
The key tax consideration for sellers is not SDLT but capital gains tax (CGT) — which applies to the gain on the sale, not to the transaction itself. Understanding CGT, and the important reliefs that may eliminate it entirely, is the primary tax task for property sellers.
Capital Gains Tax Basics
Capital Gains Tax is charged on the gain arising on disposal of a capital asset — including property. The gain is calculated as the disposal proceeds minus the original acquisition cost and allowable expenditure (improvement costs, acquisition costs, disposal costs). The resulting net gain is then reduced by the annual exempt amount before the applicable CGT rate is applied.
For residential property, the relevant legislation is Taxation of Chargeable Gains Act 1992 (TCGA 1992). The basic gain calculation is: Proceeds − (Cost + Permitted Improvements + Acquisition/Disposal Costs) = Chargeable Gain.
The annual exempt amount for individuals in 2025–26 is £3,000. This has been progressively reduced from £12,300 in 2022–23. Any gains exceeding £3,000 in the tax year are taxable. If you share ownership with a spouse or civil partner, each person has their own £3,000 allowance, giving a combined £6,000 annual exemption on jointly owned property.
Allowable expenditure includes: purchase price; solicitor and estate agent fees paid on acquisition; survey costs; stamp duty paid at acquisition (SDLT is deductible); capital improvement works (e.g., extension, new kitchen — but not repairs or maintenance); and disposal costs (estate agent fees, solicitor fees on sale). CG64200 in HMRC's Capital Gains Manual provides full guidance on allowable deductions.
Private Residence Relief
TCGA 1992 ss222–226 provide Private Residence Relief (PRR), which eliminates CGT on the gain from selling a property that was your only or main residence throughout the period of ownership. For most owner-occupiers selling their main home, PRR means no CGT is payable.
PRR Covers Most Main Home Sales
If you have lived in the property as your main home from the date you acquired it to the date you sold it, PRR covers 100% of the gain. You have no CGT liability and no need to report the sale. This is the position for the vast majority of residential property sales in the UK.
PRR applies on a time-apportioned basis where the property was not the main residence for the entire period. The final 9 months of ownership always qualify for PRR regardless of whether the property was occupied as main residence — this "last 9 months" rule helps sellers who have already moved out before completing the sale.
Where only part of the gain is covered by PRR (e.g., because you let the property for part of the ownership period), only the uncovered portion is subject to CGT. Lettings relief (formerly generous) was significantly restricted from April 2020 — it now only applies where the owner is in shared occupation with the tenant.
Current CGT Rates on Property
Residential property disposals are subject to separate (higher) CGT rates than other asset classes. The rates were increased in the October 2024 Autumn Budget and apply to disposals completing on or after 30 October 2024.
| Taxpayer Status | CGT Rate on Residential Property | Applies When |
|---|---|---|
| Basic rate taxpayer | 18% | Gain falls within basic rate income tax band |
| Higher/additional rate taxpayer | 24% | Gain falls within higher or additional rate band |
| Trustees / personal reps | 24% | All residential property gains |
| Annual exempt amount (2025–26) | £3,000 | Deducted before applying CGT rate |
For basic rate taxpayers, the CGT rate on residential property (18%) is higher than the general CGT rate for other assets (also 18% since Oct 2024). For higher rate taxpayers, residential property CGT (24%) is lower than it was between 2016 and 2024 (28%). The 2024 budget brought residential property closer to other asset rates while still maintaining a distinction.
The 60-Day Reporting Rule
Since 27 October 2021 (extended from the original 30-day rule introduced in April 2020), UK residents disposing of UK residential property at a gain must both report and pay any CGT due within 60 days of the completion date. This is a significant change from the previous system where CGT was reported through self-assessment and not paid until the following January.
60-Day Deadline — Penalties Apply
Failure to submit a CGT return (using HMRC's "Report and Pay CGT on UK Property" service) within 60 days of completion attracts an automatic £100 penalty. Further penalties accrue if still outstanding after 6 months (£300 or 5% of tax, whichever is greater). This rule applies even if you file a self-assessment return.
The 60-day rule applies when: (1) you are a UK resident; (2) you disposed of UK residential property; and (3) there is a CGT liability after taking account of PRR, lettings relief, and the annual exempt amount. It does not apply to main home sales where PRR eliminates the gain entirely.
CGT paid within 60 days is a "payment on account". If you subsequently file a self-assessment return (e.g., because you have other income to declare), any CGT overpayment within the 60-day system is refunded. Underpayments attract interest from the 60-day deadline.
SDLT Surcharge Refund Connection
While sellers pay no SDLT on the sale itself, completing a sale can trigger an SDLT refund from a previous purchase. This applies to sellers who:
- Purchased a new main residence before selling their previous main residence
- Paid the 5% additional dwelling surcharge at the time of the new purchase
- Are now selling the previous main residence within 36 months of the new purchase completing
In this scenario, the completion of the sale is the qualifying event that triggers the SDLT60 refund claim. The refund must be claimed within 12 months of the sale completing. This can represent a significant windfall at the point of sale — on a £450,000 previous purchase, the surcharge refund could be over £22,000.
Checklist: Does a Surcharge Refund Apply?
Ask: Did I pay the additional dwelling surcharge when I bought my current home? Am I now selling a previous main residence? Is this sale completing within 36 months of that earlier purchase? If yes to all three — submit SDLT60 promptly after this sale completes. See our guide on next property planning for full details on the 36-month refund mechanism.
Costs of Selling
While SDLT is zero for sellers, selling a property involves several costs that affect the net proceeds:
| Cost | Typical Amount | CGT Deductible? |
|---|---|---|
| Estate agent fees | 1%–1.8% + VAT of sale price | Yes |
| Conveyancing / solicitor fees | £800–£2,000 + VAT | Yes |
| Energy Performance Certificate (EPC) | £60–£120 | Partial |
| Early repayment charges (mortgage) | 1%–5% of outstanding balance | No |
| Removal costs | £600–£3,000+ | No |
Estate agent fees and solicitor fees are both deductible for CGT purposes, reducing the chargeable gain. Use our cost of selling calculator to model the net proceeds after all selling costs.
Worked Examples
Example 1: Selling a Buy-to-Let Property — CGT Calculation
Property: Buy-to-let flat purchased in 2018 for £220,000, sold in 2026 for £310,000
Acquisition costs: £3,500 (solicitor + SDLT paid at time of purchase)
Improvements: £8,000 (new kitchen, 2022)
Disposal costs: £4,200 (estate agent 1.4% + VAT + solicitor)
Gross gain: £310,000 − £220,000 = £90,000
Less allowable costs: £3,500 + £8,000 + £4,200 = £15,700
Net chargeable gain: £90,000 − £15,700 = £74,300
Less annual exempt amount: £74,300 − £3,000 = £71,300 taxable
CGT at 24% (higher rate taxpayer): £71,300 × 24% = £17,112
Must be reported and paid within 60 days of completion.
Example 2: Selling Previous Main Residence — Surcharge Refund Triggered
Scenario: Sarah bought a new house in January 2025 for £500,000 before selling her old flat. She paid the 5% additional dwelling surcharge of £25,000. She sells the old flat in February 2026 — 13 months later, well within the 36-month window.
SDLT paid at January 2025 purchase: £50,000 (standard £25,000 + £25,000 surcharge)
Surcharge refund available (SDLT60): £25,000 — must claim within 12 months of February 2026 sale
CGT on old flat sale: If old flat was main residence throughout ownership: PRR covers entire gain — £0 CGT
Tax-Efficient Timing
For sellers with a CGT liability (particularly landlords and second home owners), timing the sale can meaningfully reduce the tax payable:
Straddle the tax year
If you complete near the end of the tax year (e.g., completing in April rather than March), you use the new tax year's annual exempt amount. A £3,000 saving at 24% is £720 — worth considering if completion dates are flexible.
Transfer to spouse before sale
Transfers between spouses and civil partners are CGT-exempt. Transferring a share of the property to a spouse before sale utilises their annual exempt amount (£3,000) and potentially their lower CGT rate. Take specialist advice as HMRC scrutinises pre-sale transfers.
Re-occupy before sale to extend PRR
If you have previously lived in the property but have been letting it, returning to occupy the property as your main residence before sale can extend the PRR period and reduce the chargeable gain. HMRC will examine the genuineness of any occupation.
Frequently Asked Questions
Do I pay stamp duty when selling?
No. Under FA 2003 s43(1), SDLT is exclusively a buyer's tax. Sellers have no SDLT liability on any residential or commercial property sale, regardless of the sale price.
When does CGT apply to a property sale?
CGT applies when the property is not (or not fully) covered by Private Residence Relief — typically investment properties, second homes, or buy-to-lets. If PRR applies for the entire ownership period, no CGT is due and no reporting is required.
What is the 60-day reporting rule?
Since April 2020, CGT on residential property sales must be reported and an estimated payment made within 60 days of completion using HMRC's "Report and Pay CGT on UK Property" service. Failure to report within 60 days incurs an automatic £100 penalty, with further penalties for continued non-compliance.
Can selling trigger an SDLT refund?
Yes. If you paid the additional dwelling surcharge when buying your current home before selling your previous one, you can reclaim it when the previous home's sale completes — provided the sale completes within 36 months of the earlier purchase. Use SDLT60 and claim within 12 months of the disposal.
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Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Stamp Duty Calculator to help buyers understand the complex world of property transaction taxes.