Selling a rental property: a guide for landlords
Selling a rental property involves three things a normal home sale doesn't: Capital Gains Tax on any rise in value, what to do about your tenants, and the landlord paperwork a buyer will want to see. In England and Wales, any Capital Gains Tax on a residential property has to be reported and paid within 60 days of completion. In England, section 21 ended on 1 May 2026, so getting a house empty to sell now takes at least 4 months' notice and can involve a court. This guide walks through the timing, the tax, the tenants and the honest pros and cons of each way to sell.
It's general information for England and Wales, not tax or legal advice. An accountant can work out your tax properly, and it's worth speaking to one before you agree a sale.
Is now the right time to sell?
There's rarely a perfect moment, but these are the things landlords usually weigh up:
- Your tenancy. Selling with tenants in place can happen straight away. Selling empty needs notice, and in England the notice can't usually end in the first 12 months of a tenancy.
- Your mortgage. If you're in a fixed-rate deal, selling before it ends may mean an early repayment charge. Ask your lender for a redemption statement. See early repayment charges.
- Tax changes. The government has announced separate income tax rates for property income from April 2027: a property basic rate of 22%, a higher rate of 42% and an additional rate of 47%. If you're deciding whether to keep letting, factor that into your sums and check GOV.UK for how it applies to you.
- Rules for landlords. In England, a national database of landlords starts rolling out from late 2026, and a landlord ombudsman follows. In Wales, landlords must already be registered with Rent Smart Wales.
- The property's condition. Rented homes must normally have an EPC rating of E or above to be let. If yours needs work to keep letting, selling as it is may make more sense.
Capital Gains Tax when you sell a rental property
Capital Gains Tax is charged on your gain: broadly, the sale price minus what you paid, minus allowable costs.
| What | 2026 to 2027 tax year |
|---|---|
| Annual exempt amount (tax-free gains) | £3,000 per person |
| Rate on gains within your unused basic rate band | 18% |
| Rate on gains above the basic rate band | 24% |
| Basic rate band (on top of the £12,570 personal allowance) | £37,700 |
| Deadline to report and pay | Within 60 days of completion |
Costs you can deduct include estate agent and solicitor fees for buying and selling, and the cost of improvements such as an extension. Normal maintenance, such as redecorating between tenants, doesn't count.
If you own it jointly, each owner works out the gain on their own share and gets their own £3,000 allowance.
If you once lived there, you may get Private Residence Relief for the time it was your only or main home, plus the final 9 months of ownership. Letting relief only applies if you lived in the property at the same time as your tenants, sharing it with them.
A worked example
A landlord bought a house for £150,000 and sells it for £230,000. Buying and selling costs come to £10,000, so the gain is £70,000. After the £3,000 allowance, £67,000 is taxable.
Their taxable income for the year (after the personal allowance) is £17,430, leaving £20,270 of the £37,700 basic rate band unused.
- £20,270 at 18% = £3,648.60
- £46,730 at 24% = £11,215.20
- Total Capital Gains Tax: £14,863.80, to be reported and paid within 60 days of completion.
Our Capital Gains Tax calculator works this out with your own figures, and Capital Gains Tax on property goes into more detail.
What happens to your tenants
You have two choices: sell with the tenants in place, or end the tenancy lawfully and sell the house empty.
- Tenants in place: the tenancy carries on and the buyer becomes the landlord. The deposit usually passes to the buyer, who must keep it protected.
- Empty, in England: serve a section 8 notice using ground 1A, giving at least 4 months' notice. If the tenants don't leave, you need a court order. Once you've served the notice you can't let the property again, or market it to let, until 12 months after the notice ends.
- Empty, in Wales: give a landlord's notice of at least 6 months under a periodic standard contract. It can't be given in the first 6 months of occupation.
Our guide to selling a house with tenants explains the notice rules, deposits and tenants' rights in full.
The paperwork a buyer will ask for
Have these ready before you market the property:
- Tenancy agreement (or written statement in Wales), and a record of rent paid and any arrears
- Deposit protection certificate, showing the deposit is in a government-approved scheme
- Energy Performance Certificate: you need a valid one before you market a property for sale, and it lasts 10 years
- Gas safety record, if there are gas appliances
- Electrical safety report: in England, the electrics in a rented home must be inspected and tested at least every 5 years
- Licences, such as an HMO licence, and Rent Smart Wales registration in Wales
- Any notices served, and correspondence about repairs or disputes
Gaps in the paperwork make investors nervous and can lead to lower offers, so it pays to sort them out first.
Selling a portfolio
If you're selling several properties, you can sell them one by one or as a package to one buyer.
- One by one usually gets more per property, especially for homes you can sell empty, but it takes longer and means more viewings, solicitors and paperwork.
- As a package is quicker and simpler, but buyers expect a lower price per property for taking on several at once.
Each sale is a separate disposal for Capital Gains Tax, and each one has its own 60-day deadline to report and pay. Talk to your accountant before you start: the order and timing of sales can change your tax bill. If the properties are on one portfolio mortgage, ask the lender how releasing each property works.
Your options for selling
| Route | Price | Speed | Good for |
|---|---|---|---|
| Estate agent, sold empty | Usually the highest | Notice period plus several months to sell | Houses that suit owner-occupiers, when you can wait |
| Estate agent, sold tenanted | Often lower than empty | Weeks to months, investor buyers only | Well-let homes with good tenants |
| Auction | Uncertain, with fees | Weeks from listing | Homes needing work, or tricky tenancies |
| Cash buyer | Usually below market value | Can be weeks | Landlords who want a quick, certain exit |
When an estate agent is likely to get you more: if the property is in good condition, you can wait for it to be empty, and owner-occupiers are the natural buyers in your area. A quick sale won't suit landlords who can wait and want the highest price.
When a quick sale can make sense: if the property needs work you don't want to fund, the tenancy is difficult, or you want a clean exit on a date you choose. You give up some of the price for speed and certainty.
Cash buyers, including us, usually pay below market value. We make an offer within 24 hours, explain how we worked it out from recent sales nearby, buy homes as they are, pay the legal fees and let you choose the completion date. Tell us about any tenancy up front, as it affects the offer. There's no obligation to accept.
Questions people ask
How much Capital Gains Tax will I pay on a rental property?
It depends on your gain and your income. For the 2026 to 2027 tax year, you take the sale price, subtract what you paid and the costs of buying, selling and improving the property, then subtract the £3,000 annual exempt amount. The rest is taxed at 18% where it falls within your unused basic rate band and 24% above that. Joint owners each pay on their own share.
When do I have to pay Capital Gains Tax after selling?
If you're a UK resident and sell a UK residential property with tax to pay, you must report the sale and pay the tax within 60 days of completion, using a Capital Gains Tax on UK property account on GOV.UK. Late reports and payments can mean interest and penalties, so line up your figures, including your buying and selling costs, before completion day.
Can I sell a rental property with tenants in it?
Yes. The tenancy carries on, the buyer becomes the new landlord, and the deposit is usually passed to them to keep protected. Tenanted homes appeal mainly to investors, so the price is often lower than for the same house empty. In England, if you want the house empty instead, you now need to use ground 1A with at least 4 months' notice, as section 21 has ended.
Do I need an EPC to sell a rented house?
Yes. You need a valid Energy Performance Certificate before you market a property for sale, just as you do to let it. An EPC lasts 10 years, so the one you have for letting may still be valid. Privately rented homes in England and Wales must normally be rated E or above, and a buyer who wants to keep letting it will check.
Can I move into my rental property to avoid Capital Gains Tax?
Living in a property as your genuine only or main home can bring Private Residence Relief for that time, plus the last 9 months you own it. But the years it was let still count, so it usually reduces the tax rather than removing it, and HMRC looks at whether it really was your home. Get advice from an accountant before you plan around it.
Sources
- Capital Gains Tax rates and allowances (GOV.UK)
- Tax when you sell property: work out your gain (GOV.UK)
- Report and pay Capital Gains Tax on UK property (GOV.UK)
- HS283 Private Residence Relief (HMRC)
- Changes to tax rates for property, savings and dividend income (GOV.UK)
- Guide to the Renters' Rights Act (GOV.UK)
- Possession when a landlord wants to sell or move in (Shelter Legal England)
- Renting homes: frequently asked questions for landlords (Welsh Government)
- Energy Performance Certificates when buying or selling (GOV.UK)
- Domestic private rented property: minimum energy efficiency standard (GOV.UK)
- Electrical safety standards in the private rented sector: guide for landlords (GOV.UK)
- Tenancy deposit protection (GOV.UK)
Related guides
Selling a house with tenants in England and Wales
In England, section 21 no-fault notices ended for private tenancies on 1 May 2026. A landlord who wants to sell with the house empty now uses ground 1A, with at least 4 months' notice, and usually can't use it in a tenancy's first 12 months. In Wales, a landlord's notice under a periodic standard contract is at least 6 months. Or you can sell with the tenants still living there.
Costs and moneyCapital Gains Tax on property: rates, allowances and the 60-day rule
Capital Gains Tax is charged on the profit (the gain) when you sell or give away a property that isn't your main home, such as a buy-to-let, second home or inherited house. For the 2026 to 2027 tax year the first £3,000 of gains is tax-free, then the rate is 18% within the basic rate band and 24% above it. Tax on a UK home must be reported and paid within 60 days of completion.
Free calculatorsCapital Gains Tax calculator for property
For the 2026 to 2027 tax year, Capital Gains Tax on a property that was never your main home is 18% on the part of the gain that fits in your unused basic rate band and 24% on the rest, after a £3,000 tax-free allowance. UK residents usually have to report and pay within 60 days of completion. Enter your figures below for an estimate.
General information for England and Wales, not legal, tax or financial advice. Last checked 26 October 2026.