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Tax Intelligence Hub
How tax works by deal type
Understand the taxes that apply to each strategy before you run the numbers.
Educational guidance only. This is general information about how UK property taxes typically work by deal type — it is not tax, legal or financial advice, and rates and rules change. Always confirm your position with a qualified accountant or tax adviser before making any investment decision.
Buy-to-Let
Standard single-let residential. The most affected by the Section 24 mortgage interest restriction.
View full Buy-to-Let tax guideAcquisition
Buying-in taxes
- Stamp Duty Land Tax (SDLT) — standard residential bands apply on the purchase price.
- 3% additional-property surcharge — added to every band if you already own any residential property anywhere in the world.
- Limited-company purchase — the 3% surcharge still applies, and the 15% flat rate can apply to homes over £500k bought by certain corporate bodies.
- Land Transaction Tax (Wales) / Land & Buildings Transaction Tax (Scotland) — the devolved equivalents of SDLT if the property is there.
- No first-time-buyer relief on a buy-to-let purchase.
- VAT — not normally chargeable on a second-hand residential purchase.
Holding
Taxes while you own & rent it
- Income Tax — net rental profit taxed at your marginal rate (20% / 40% / 45%) if held personally.
- Section 24 — mortgage interest is not a deductible expense; instead you get a 20% basic-rate tax credit, hitting higher/additional-rate landlords hardest.
- Corporation Tax — if held in a limited company, profits are taxed at company rates and mortgage interest is fully deductible.
- Dividend / salary tax — extracting company profits triggers dividend tax or PAYE on top.
- Council Tax — liable during any void periods when there is no tenant.
- Class 2/4 National Insurance — only if HMRC treats your letting as a trade (rare for standard BTL).
Exit
Taxes when you sell or pass it on
- Capital Gains Tax (CGT) — charged on the gain after the annual exempt amount, at residential rates (currently 18% basic / 24% higher).
- 60-day CGT reporting — UK residential disposals must be reported and the tax paid within 60 days of completion.
- Corporation Tax on gains — company-held property pays this instead of personal CGT.
- Inheritance Tax (IHT) — the property counts in your estate at 40% above the nil-rate band if passed on death.
- No Private Residence Relief — unless it was genuinely your main home for a period.
Run the numbers
Open a live calculator to estimate the tax on your specific deal.