Selling a property can be a profitable venture, but the looming spectre of Capital Gains Tax (CGT) can take a hefty bite out of your earnings. If you’re wondering how to reduce Capital Gains Tax when selling a property, you’re in the right place. Let’s dive into some savvy strategies to keep more money in your pocket.
How to Reduce Capital Gains Tax When Selling a Property?
Before we get into the nitty-gritty, let’s clarify what CGT is. It’s a tax on the profit you make when you sell an asset that’s increased in value. For property sales, it applies to second homes and buy-to-let properties, not your main residence.
1. Use Your Annual CGT Allowance
Everyone has a yearly CGT allowance, which for the 2024/25 tax year is £3,000. This means you can make gains up to this amount without paying any tax. If you’re selling a property jointly with a spouse or partner, you can combine your allowances, effectively doubling it to £6,000.
2. Offset Losses Against Gains
If you’ve made losses on other asset sales in the same tax year, you can use these to offset your gains and reduce your CGT bill. You can even carry forward unused losses from previous years.
3. Claim Private Residence Relief
If you’ve lived in the property as your main home at any point, you might be eligible for Private Residence Relief. This can significantly reduce or even eliminate your CGT liability.
4. Consider Letting Relief
If you’ve let out a property that was once your main home, you might qualify for Letting Relief, which can reduce your CGT bill by up to £40,000.
5. Deduct Eligible Costs
Don’t forget to deduct any costs associated with buying, selling, or improving the property. This includes estate agent fees, solicitor costs, and even the cost of significant home improvements.
6. Time Your Sale Wisely
If you’re close to the end of the tax year, consider delaying the sale to the next tax year. This way, you can use two years’ worth of CGT allowance.
7. Transfer Assets to Your Spouse
Transfers between spouses are tax-free, so you could transfer a share of the property to your spouse before selling, allowing you to use both of your CGT allowances.
Get Expert Advice
While these tips can help, tax laws are complex and ever-changing. It’s always best to get professional advice tailored to your situation. If you’re thinking of selling a property and want to minimise your tax liability, why not get in touch with us at Property Saviour?
Sell Your Property Fast and Avoid CGT Headaches
If you’re looking to sell your property quickly and with minimal fuss, Property Saviour could be the answer. We buy properties directly, offering a fast, hassle-free sale that could help you avoid CGT altogether if it’s your main residence.
Here’s why selling to Property Saviour could be your best option:
- Speed: We can complete the sale in as little as 10 days.
- No fees: We cover all the legal costs, saving you thousands.
- Certainty: Our offer is guaranteed, with no last-minute price reductions.
- Simplicity: We handle all the paperwork, making the process stress-free.
Don’t let CGT worries hold you back from selling your property. Get in touch with Property Saviour today, and let’s discuss how we can help you sell your property quickly.
At Property Saviour, we’re always happy to chat about your options and help you find the best solution for your situation.
So why wait? If you’re thinking about selling a property and want to know more about reducing your CGT liability, give us a call. We’re here to help you make the most of your property sale.
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
