UK property has long attracted investors worldwide for its steady returns and solid capital growth — but on pure return, do sellers actually keep the whole gain when they sell? Beyond tax, selling a UK property involves other costs that do not go to the government, and some of these must be paid before completion even happens. This article sets out the necessary costs of selling a UK property in the UK and the other costs that may arise — moving costs, conveyancing fees on the transfer, and so on — to help you work out, more precisely, what your UK property investment actually returned from purchase to sale.
Capital Gains Tax
UK capital gains tax covers property, shares, funds, cryptocurrency, paintings, antiques and more. Any personal asset worth more than £6,000 is potentially in scope: if the total profit on selling it exceeds the annual capital gains tax-free allowance — £3,000 for 2024/25 onward, down from £12,300 in 2020-2022 and £6,000 in 2023/24 — capital gains tax is due. Only the gain — not the whole sale proceeds — is taxed. Once your net gain exceeds the tax-free allowance, only the excess is taxed. The rate that applies depends on the seller’s taxable income for that year: 18% below the higher-rate threshold, and 24% for higher/additional-rate taxpayers (reduced from 28% for disposals from 30 October 2024).
What Counts as an “Asset”?
UK capital gains tax covers property, shares, funds, cryptocurrency, paintings, antiques and more. Any personal asset worth more than £6,000 is in scope, and once total profit on sale exceeds the annual tax-free allowance — £3,000 for 2024/25 onward, down from £12,300 in 2020-2022 and £6,000 in 2023/24 — tax is due — so a UK property investor whose property has gone up in value must also pay this tax on sale. Again, only the gain is taxed, not the whole amount received; only the portion of the gain above the tax-free allowance is taxable.
When You Are Exempt
If the property you are selling has been your main home for most of the time you owned it, you did not let out any part of it (such as a single room) during that time, you did not use any part of it for business purposes, the whole property is no larger than one acre, and it was not held for investment or profit-making purposes, then no CGT is due on sale. The UK government calls this Private Residence Relief. Meeting only some of these conditions does not give you a full exemption, but it can still reduce your overall capital gains tax bill.
Private Residence Relief (PRR): https://www.gov.uk/tax-sell-home
The Rate Depends on Your Personal Income
UK capital gains tax is linked to the seller’s personal income, because the rate follows the individual income tax band: UK residents below the higher-rate income tax threshold pay CGT at 18%; higher- and additional-rate taxpayers pay CGT at 24% (reduced from 28% for disposals from 30 October 2024). For a non-UK resident owner, the calculation adds the taxable income for that tax year (including rental income) to the taxable net gain for the same year. Both the personal allowance and the CGT annual exempt amount can be deducted in the calculation — currently £12,570 and £3,000 respectively. The gain can also be reduced by other costs incurred on purchase, such as legal and surveyor’s fees. It is the combined total of income and gain that determines the capital gains tax band. Taking a current-year example: after deducting allowances, the portion within the basic-rate band is taxed at 18%, and any amount above it is taxed at 24%. So how much capital gains tax you pay when selling in the UK also depends on your annual income — you might have a fairly modest net gain on the property itself, but pay more tax overall because your salary is high. The UK government provides an online capital gains tax calculator for this purpose.
Capital gains tax bands (current)
| Band | Total gain | Rate |
|---|---|---|
| Tax-free allowance | £0 – £3,000 | 0% |
| Basic rate band | Within the basic-rate income tax band | 18% |
| Higher rate band | Above the basic-rate income tax band | 24% |
UK capital gains tax calculator: https://www.tax.service.gov.uk/calculate-your-capital-gains/non-resident/
Worked example
Property acquired 2019: £412,890
Resold 2023: £511,984
Net profit: £99,094
Less: costs incurred 2019–2023: (£45,000)
Taxable capital gain: £54,094
UK capital gains tax at the current higher rate of 24% (not the former 28%): approximately £12,983*
*This is a higher-rate example, not the basic rate. The rate that actually applies depends on the seller’s own income tax band for the year of sale — see “The Rate Depends on Your Personal Income” above.
Estate Agent Commission
Most UK sellers use an estate agent to sell their property. Under UK practice, it is the seller — not the buyer — who pays the estate agent’s commission or fee. Fees vary by agent: the typical range is 1%–3% of the sale price, averaging around 1.18% plus VAT (about 1.42% including VAT); commission in London tends to run a little higher. This figure is negotiable, so it is worth agreeing the commission and exactly what it covers with the agent before instructing them, and getting it in writing.
Conveyancing (Transfer) Legal Fees
Selling also involves a solicitor’s conveyancing fee, and the range here can be wide. UK conveyancing fees are generally charged in one of two ways — a percentage of the sale price, or a flat fee — and selling-side fees are usually lower than buying-side fees for the same transaction. The fee also depends on whether the property is freehold or leasehold, and whether there is an existing mortgage on it: a mortgaged property generally means more work for the solicitor and a higher fee. Typical UK conveyancing fees for a sale currently run around £550–£1,000 including VAT.
Moving Costs: EPC, Transport and Logistics
When selling in the UK there is one compulsory step: ordering an Energy Performance Certificate (EPC) for the property being sold. An EPC sets out the property’s energy efficiency, its various energy costs, and advice on how to save money and reduce energy use. Only an accredited assessor can inspect the property and issue an EPC. Sellers can buy an EPC directly from a provider online, or their estate agent can arrange it for them. A typical EPC costs around £35–£100.
UK government — Find an energy certificate: https://www.gov.uk/find-energy-certificate
Transport and logistics costs are for each seller to decide based on their own needs — this covers moving personal belongings such as furniture out of the property being sold. These costs are highly individual and depend on the distance and volume being moved.
Summary
When selling a UK property, tax is calculated on a fixed basis, but other costs — legal fees, agent commission, the EPC and so on — can generally be negotiated directly with each service provider based on what you need. We recommend approaching providers proactively regardless of which service you need, but do check that the provider actually covers the area where the property is located; using a firm local to that area tends to save both time and money.
If you have questions about any of the costs above, ask Zagdim.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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