he UK property tax landscape continues to evolve, and landlords heading into 2026 face tighter allowances, higher surcharges, and greater reporting obligations. Whether you are selling a buy-to-let, purchasing a second property, or restructuring ownership within the family, understanding the current rules is essential for avoiding unnecessary tax exposure.
Capital Gains Tax (CGT) on Residential Property
Since October 2024, the higher rate of Capital Gains Tax on residential property has been reduced from 28% to 24%, while the basic rate remains at 18%. Although the reduction offers some welcome relief for landlords, the sharp reduction in the annual CGT allowance means far more property disposals now create a taxable liability.
The annual exempt amount is currently just £3,000, compared with £12,300 only a few years ago. In practice, this means most property sales will now result in some level of CGT being payable.
Example
A landlord selling a buy-to-let property with a taxable gain of £120,000 could face a CGT bill of £28,800 at the 24% rate. Under the previous 28% regime, the liability would have been £33,600 — a difference of £4,800.
However, the final tax outcome depends heavily on timing, ownership structure, available reliefs, and the seller’s wider income position in the tax year.
SDLT Rates & Surcharges in 2026
Stamp Duty Land Tax remains a significant upfront cost for property investors and second-home buyers.
Key SDLT rules currently affecting landlords:
Second homes and buy-to-let properties attract a 5% surcharge on top of standard residential SDLT rates
Non-UK resident buyers face an additional 2% surcharge
First-time buyers continue to benefit from relief, with no SDLT payable up to £300,000 and reduced rates up to £500,000
Companies purchasing residential property over £500,000 may be subject to the 17% flat SDLT rate unless reliefs are available
For portfolio landlords and corporate investors, SDLT costs can quickly become one of the largest transaction expenses, making pre-purchase tax planning increasingly important.
Three Important Tax Planning Opportunities
-
Consider the Timing of a Sale
The timing of a disposal can significantly affect the amount of CGT payable. Selling during a year in which your taxable income is lower may allow more of the gain to fall within the 18% CGT band rather than the higher 24% rate.
-
Review Principal Private Residence (PPR) Relief
PPR Relief remains available where a property has previously been your main residence. However, the final exemption period is now only 9 months, reduced from the previous 18-month window. If you have moved out of a former home that is now being sold, delaying the sale could reduce the relief available.
-
Use Spousal Transfers Efficiently
Transfers between spouses or civil partners are generally free from Capital Gains Tax. In many cases, transferring a share of a property before disposal can allow both individuals to utilise their lower tax bands and annual exemptions, potentially reducing the overall CGT bill.
Why Early Tax Advice Matters
Many landlords only seek advice after contracts have been exchanged or returns submitted, by which point valuable planning opportunities may already have been lost.
A pre-sale review can help identify:
Available reliefs and exemptions
Opportunities to reduce higher-rate CGT exposure
SDLT implications on future purchases
Whether ownership restructuring could improve tax efficiency
Potential reporting and payment deadlines
With property taxation becoming increasingly complex, taking advice before a transaction — rather than after — can make a substantial financial difference.
Final Thoughts
While the reduction in CGT rates offers some benefit to landlords, the combination of reduced allowances and increased SDLT surcharges means property taxation remains a major consideration for investors in 2026.
Careful planning around ownership, timing, and reliefs is now more important than ever for protecting returns and avoiding unnecessary tax costs.
For more information, call us at 020 7112 9098, email info@accountancyntax.co.uk, or visit our website at www.accountancyntax.co.uk.
