Selling your house is a stressful time as it is, without worrying about whether or not you need to be concerned with paying tax. Luckily for you, here at UK Property Cash Buyers, we’ve put together a simple guide that should tell you whether you’ll have to pay tax or not. Read on to find out more.
What tax bill could you have to pay?
However, you don’t always have to pay capital gains tax when you sell or dispose of your residential property. There are some conditions that mean you won’t have to pay CGT. These are:
– This is your only home, and it was the main home you lived in while owning it
– No parts of the property were let out – this excludes having a lodger
– No part of the building has been used for business-only
– The grounds, and all buildings, are less than 5,000 square metres overall
– It wasn’t bought just to make a profit
If all of these conditions apply to you, you won’t have to do anything; Private Residence Relief will be automatically applied.
Please note that you must fulfil all of the above conditions to be exempt from paying Capital Gains Tax – if you only fulfil half, you may still have to pay some of the CGT.
What about inheritance tax?
It’s important to note that CGT is payable on any amount that you make above the value of the property when you inherited it. This means if you inherited a house two years ago and it was valued at £300,000, but you sell it for £400,000 a few years later, you will have to pay Capital Gains Tax on your net profit. However, you are entitled to deductions, including any fees you’ve had to pay while inheriting the property. Make sure you keep hold of all receipts relating to the property to see if you are entitled to some tax relief.
What if you’re selling a buy-to-let property?
Capital Gains Tax may also apply to you if you’re selling a buy-to-let property or a home that isn’t your first and main home. Capital Gains Tax is also payable if you use your home at least partly as a business premises, or if you formally lease out part of the property.
Do I have to pay tax selling my house?
UK PCB is a company that can help people sell a property in the UK. Compared to real estate agents, we offer a fast and hassle-free sale of your property, with no hidden or referral fees, and all of our property buyers are pre-approved cash buyers. Get in touch today to begin selling your property, no matter its condition, and organise a no-obligation valuation.