Capital Gains Tax on Property: Should You Sell or Hold?

Fri 09 Oct 2026

Reports in The Times and other outlets ahead of the 28 October Budget suggest that capital gains tax on property could rise. Some reports say it might even be raised to match income tax rates.

This has led to a wave of questions from landlords and second homeowners. The big one is simple: should I sell now, before any change, or should I hold on?

There is no single right answer for everyone. But there are some clear points that can help you think it through calmly.

What is capital gains tax?

Capital gains tax (often shortened to CGT) is a tax on the profit you make when you sell something that has gone up in value. With property, it usually applies to:

buy-to-let homes
second homes and holiday homes
inherited property you do not live in

It does not normally apply to the home you live in as your main home.

You only pay tax on the gain, which is the difference between what you paid and what you sell for, minus certain costs such as buying and selling fees and some improvement work. Everyone also has a small tax-free allowance each year, which is currently £3,000.

How the rates could change

At the time of writing, capital gains tax on property is charged at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. Income tax rates are higher. If the two were matched, as some reports suggest, the tax on a property sale could go up by a lot.

The table below shows the current rates next to income tax rates. Please remember that no change has been confirmed.

Taxpayer band	Capital gains tax on property now	Income tax rate	Possible rise if rates were matched
Basic rate	18%	20%	2 percentage points
Higher rate	24%	40%	16 percentage points
Additional rate	24%	45%	21 percentage points

Here is a simple example. Imagine a higher-rate taxpayer makes a taxable gain of £60,000 on a rental property. At 24%, the tax would be £14,400. At 40%, it would be £24,000. That is a difference of £9,600 on the same sale.

Figures like this explain why so many people are asking questions. But a bigger tax bill in theory does not always mean selling now is the right move.

Should you sell before the Budget?

One leading property market professional put it plainly:

"If you were going to sell the property anyway within the next year, then by all means accelerate it. That just makes sense," he said. "But if you had no intention of ever selling the property in the imminent future, to sell it because you think tax rates might go up, that would be a mistake. You're generating a tax liability you weren't going to have anyway."

In other words, the key question is not "might rates go up?" It is "was I already planning to sell?"

If you sell a property you had planned to keep for many years, you create a tax bill today that you might never have had to pay. You also lose the rent the property brings in, and any future rise in its value.

A quick guide to your options

This table sets out the two main situations and what they could mean for you.

Your situation	What to think about	Possible approach
You were already planning to sell within the next year	Selling a little sooner could help you avoid a higher rate if one is brought in	Speak to an adviser and plan a sale with a realistic timeline
You planned to keep the property for the long term	Selling now creates a tax bill you were not going to have	Holding on is often the calmer choice, but get advice first
You are not sure what you want to do	Rumours can push people into rushed choices	Find out what your property is worth and what tax you might owe before deciding

The problem of time

Even if selling soon makes sense for you, there is a practical problem: time.

Selling a home on the open market takes a while. You need to find a buyer, agree a price, and then let the solicitors do their work. It is very unlikely that a sale started now would be completed before the Budget announcement. To understand why, it helps to know how long it takes to exchange contracts on a typical sale.

It is also worth knowing that any new tax rates might start straight away, or from a later date such as the start of the next tax year. Nobody will know until the Chancellor speaks.

This means that rushing to list a property in the next few days is unlikely to help. If you think you may want to sell sooner than planned, the better move is careful planning rather than a quick reaction.

If you do decide to sell

If selling fits with your long-term plans, a bit of preparation goes a long way. Some useful steps include:

getting an up-to-date valuation so you know what your property is worth
working out your likely gain and tax bill with an accountant
checking whether you have tenants and what notice rules apply
gathering your paperwork, such as purchase records and receipts for improvements
remembering that UK residential property sales with tax to pay must usually be reported to HMRC, and the tax paid, within 60 days of completion

If you own a rental with tenants still living in it, our guide to selling a tenanted property in Essex explains the steps in plain terms.

Frequently asked questions

Has capital gains tax on property gone up?

Not yet. At the time of writing, any rise is only rumoured. We will only know for sure on 28 October.

Do I pay capital gains tax when I sell my own home?

Usually not. If the property has been your main home the whole time you have owned it, you will normally not pay capital gains tax when you sell.

Can I complete a sale before the Budget?

It is very unlikely. Most open market sales take weeks or months from offer to completion, so any plan to sell sooner needs careful thought rather than a rushed decision.

Should I sell now just in case?

If you were already planning to sell soon, it may be worth talking to an adviser about the timing. If you were planning to keep the property, selling only because of rumours could leave you with a tax bill you did not need to pay.

How we can help

Our team in Benfleet and Hockley works with landlords and homeowners across South Essex every day. We cannot give tax advice, but we can help you understand what your property is worth and how long a sale is likely to take in today's market.

If you would like a clear picture before you make any decisions, you can book a free property valuation with us at any time.

This article is for general information only and does not constitute financial, tax or legal advice, or a recommendation by Williams and Donovan to sell or retain a property. Potential Budget changes remain unconfirmed. Seek independent advice from a suitably qualified adviser before making any decision.