Landlords and inflation: what you need to know if you’re selling up

With rising interest rates and inflation driving the costs of owning a rental property ever higher, many landlords have been downsizing their property portfolio or exiting the market altogether. What do landlords need to think about before selling a buy-to-let property, in terms of capital gains tax and tax planning?

Capital gains tax

House values have jumped significantly in recent years, so many individuals and trustees who are landlords will face paying capital gains tax if they dispose of a rental property where they’ve made a gain.

To compound matters, in the Spring Budget 2023, the Government announced massive reductions for the ‘annual exemption’ which helps to reduce capital gains tax payable. The allowance for individuals has already been cut from £12,300 to £6,000 and is set to be slashed again down to £3,000 in 2024/25. This will mean more landlords are charged capital gains tax on the disposal of a buy-to-let property.


Where capital gains tax is payable on the disposal of a UK residential property, landlords must report the transaction and pay the tax within 60 days of completion. This can be done online via the website.

Failure to report and pay by the deadline will result in HMRC levying penalties and interest until the reporting is completed and the tax is paid. So it’s very important for taxpayers to be mindful of this deadline.

The disposal will also need to be reported in your self-assessment tax return (if you normally have to a file a tax return), with credit given for tax already paid.

Tax planning

There are, in some circumstances, ways to help reduce or eliminate a capital gains tax liability by careful planning prior to the disposal taking place. If selling a buy-to-let is something you’re considering, get in touch with us. Call 0330 024 0888 or email

If you want to know more about inflation and how it’s impacting your finances generally, listen to my chat with financial advisor Tony West, from Beckett Investment Management Group, on our special podcast episode, just search Larking Gowen Insights in your podcast provider or visit our website

This article is designed for the information of readers. Whilst every effort is made to ensure accuracy, information contained in this article may not be comprehensive and recipients should not act upon it without seeking professional advice. “Larking Gowen” is the trading name of Larking Gowen LLP, which is a limited liability partnership registered in England and Wales (LLP number OC419486). Where we use the word partner it refers to a member of Larking Gowen LLP. ©Larking Gowen.

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