Which rates apply to gains on the sale of residential property?

• A. 18% and 28%
• B. 10% and 20%
• C. 0% and 10%
• D. 25% and 35%

Answer: (A)

Gains on sale of residential property are charged to Capital Gains Tax. For individuals the rate depends on your income: 18% for basic-rate taxpayers and 28% for higher-rate taxpayers. This higher rate for property reflects how gains from real estate are treated differently from many other asset types, where rates are typically lower (and depend on the type of asset). The other rate pairings shown do not apply to residential property gains under the standard rules. Remember, reliefs such as Private Residence Relief can reduce the gain—potentially eliminating tax if the property was your main home—before applying the 18%/28% rates on any remaining gain.