Selling an investment property sounds simple. Put it on the market. Take the offer. Move on.
Then Capital Gains Tax turns up. Quietly. Firmly.
If you own a buy-to-let or second property in Darlington, CGT matters in 2026 more than ever. Allowances are smaller. Rules are tighter. And mistakes can be costly.
Let’s break it down.
What Is Capital Gains Tax?
Capital Gains Tax is the tax you pay on the profit when you sell an asset. In this case, an investment property.
Profit means the difference between what you paid and what you sold for. Not the sale price itself. That part trips people up.
If the property was not your main home for the full time you owned it, CGT usually applies.
Capital Gains Tax Rates for 2026 (UK)
For residential investment properties in 2026, the UK rates are:
| Your Tax Band | CGT Rate |
| Basic rate taxpayer | 18% |
| Higher or additional rate taxpayer | 24% |
These rates apply only to the taxable gain. Not the whole sale price.
Your income that year matters. A lot.
The CGT Allowance in 2026
Every individual gets a tax-free allowance. It is small now.
£3,000 per person
That is it. Anything above that is taxed.
Married couples and civil partners can sometimes use two allowances. But only with proper planning. Not after the sale.
How CGT Is Worked Out
The maths is simple on paper. Real life is messier.
Here is the basic idea:
- Sale price
- Minus purchase price
- Minus legal fees and estate agent costs
- Minus improvement costs (not repairs)
- Minus your £3,000 allowance
What is left is your taxable gain.
New kitchens count if they added value. Fixing a leak does not. HMRC is picky here.
Reporting and Payment Deadlines
This part catches people out.
When you sell a UK residential investment property, you must:
- Report the gain
- Pay the CGT due
Within 60 days of completion
Not the tax year end. Not later. Miss this and penalties apply.
What If You Lived in the Property?
If the property was once your main home, you may qualify for Private Residence Relief.
This can reduce the taxable gain. Sometimes a lot.
But if it was always rented out, or only lived in briefly, relief is limited or not available at all.
Each case is different. Dates matter. Records matter.
Darlington-Specific Reality Check
Darlington prices have grown steadily. Not wildly. But enough.
Many landlords who bought ten or fifteen years ago are now sitting on gains they did not expect.
Especially:
- Long-term buy-to-lets
- Former homes turned rentals
- Inherited properties later sold
That quiet growth still triggers CGT.
Practical Tips for Investors in 2026
A few things that help. Not magic. Just sensible.
- Keep all paperwork. Old invoices matter.
- Time your sale if possible. Income level changes your rate.
- Use allowances wisely if selling more than one property.
- Do not assume relief applies. Check first.
Think of CGT like sand in your shoes. Ignore it and the walk gets painful.
Selling and Planning Together
At Sell House North East, we see this daily.
Investors selling solid properties, then realising too late what the tax bill looks like.