When Should You Sell a Rental Property? (UK Tax Tips)

Selling your rental at the wrong time could cost you thousands. In this blog, we’ll explain when it makes the most sense to sell — and how to minimise your Capital Gains Tax (CGT) bill.

Understand How CGT Works on Rental Property

When you sell a buy-to-let or second home, you’ll usually pay Capital Gains Tax on the profit.

You’re taxed on the gain, not the sale price:

• Gain = Sale price – Purchase price – Allowable costs
  
• You get a £3,000 CGT allowance for 2025/26
  
• Anything above that is taxed at:
  
  • 18% if you’re a basic rate taxpayer
    
  • 24% if you’re a higher or additional rate taxpayer
    

Tip 1: Sell in a Low-Income Year

This is one of the most overlooked strategies.

If you’re approaching retirement, taking time off, or reducing your hours, your income may fall — and so might your CGT rate.

✅ Basic rate taxpayers only pay 18% CGT on property.

If you wait until you’ve stopped working full-time, you could save thousands.

Tip 2: Use Two Tax Years, Not One

The CGT allowance resets every April.

If you own more than one property, consider:

• Selling one property in March
  
• Selling the next in April (new tax year)
  

That gives you two allowances (£6,000 in total), and helps spread the gain.

Tip 3: Time It Around Repairs and Void Periods

If your tenant has just moved out and the property needs work:

• Use that time to get it ready for sale
  
• Doing it while empty may allow you to market it better
  
• And you won’t be disrupting a sitting tenant
  

Also, timing the sale to avoid having a tenant mid-contract gives you more control and can boost your sale price.

Tip 4: Don’t Let Emotion Drive the Decision

Some landlords rush to sell because they’re frustrated. Others hold on because they’re too attached.

Neither is a tax strategy.

Look at the numbers:

• What’s your likely gain?
  
• Can you offset it with other losses?
  
• Do you have improvement receipts?
  
• What’s your current tax band?
  

🎥 Prefer to watch? Here’s a quick video where I explain when to sell a rental property — and how to avoid unnecessary Capital Gains Tax.

Related Reading

If you’re unsure how CGT works, read our full breakdown here: Capital Gains Tax on Property – What You Need to Know

Final Thoughts

There’s no “perfect” month to sell a rental — but there are smart timing decisions that can reduce your CGT.

If you’re planning to sell, don’t do it without understanding the tax impact.

📞 Book a clarity call today and we’ll walk through your options.