CGT on Residential Property Cut to 24% — But the Annual Exempt Amount Is Now Just £3,000
From 6 April 2024, the higher rate of Capital Gains Tax on gains from residential property (not your main home) was cut from 28% to 24%. For a higher-rate taxpayer selling a buy-to-let property, that 4-percentage-point reduction represents a meaningful saving — on a £100,000 gain, the tax bill falls from £28,000 to £24,000, a saving of £4,000. The basic rate of CGT on property, at 18%, was unchanged.
However, this reduction sits alongside a separate and significant change that works in the opposite direction: the annual CGT exempt amount — the amount of gains you can realise each tax year without paying CGT — fell from £6,000 (2023-24) to £3,000 from April 2024. This followed a prior cut from £12,300 (2022-23) to £6,000 in 2023-24. The result is that many investors with moderate gains will pay more tax in 2024-25 than they would have two years ago, even at the lower rate.
The rate cut in context
CGT rates on residential property before April 2024:
- Basic rate taxpayer: 18% (unchanged)
- Higher/additional rate taxpayer: 28% → 24%
The government's rationale for the cut was to stimulate the property market — the theory being that landlords sitting on large unrealised gains would be more willing to sell if the tax on disposal was lower, increasing housing supply for buyers. Whether this effect materialises in practice is debated among economists.
The annual exempt amount: now just £3,000
The annual CGT exempt amount (AEA) has been cut dramatically over the past two years:
- 2022-23: £12,300
- 2023-24: £6,000
- 2024-25 onwards: £3,000
This reduction affects all capital gains — not just property. Share portfolios, investment funds, and any other chargeable assets all now have a much smaller tax-free buffer. Someone who realised £10,000 in gains from shares or property in 2024-25 has £7,000 taxable (minus any losses), compared with £4,000 in 2023-24 or effectively no tax at all in 2022-23 on the same gain.
Who should be paying attention?
If you own any of the following, the combination of rate cuts and exempt amount reductions is relevant to you: buy-to-let property, second homes, inherited property you are selling, a share portfolio held outside an ISA, cryptocurrency, or business assets. The key action for many investors is to think about timing disposals — if you have gains across multiple assets, realising them across different tax years may reduce your CGT liability. Gains within an ISA or pension are sheltered entirely.
Use our Capital Gains Tax calculator to see the exact CGT owed on your gain at 2024-25 rates, including the £3,000 exempt amount.
Autumn Budget 2024: a further change
In October 2024, the new Labour government announced further CGT reforms at the Autumn Budget — raising the main CGT rate on shares from 10% (basic rate) and 20% (higher rate) to 18% and 24% respectively, aligning more closely with property CGT rates. The property rate of 24% was left unchanged. These additional changes apply from 30 October 2024 and are covered in our separate Autumn Budget 2024 guide.
Conclusion
The April 2024 CGT changes are a mixed picture: the property rate cut helps landlords and investors making large gains, while the collapse in the annual exempt amount means smaller gains now attract tax where they would previously have been fully sheltered. For anyone planning an asset disposal, the current environment makes professional advice or at least careful use of a calculator well worth the effort. Calculate your CGT now.