Can I avoid CGT on my second home by moving in?

Genuinely occupying it as your main home gives PRR for that period plus the final 9 months, but HMRC looks at the quality of occupation, not just a short stay.

What is the rate on a holiday home?

18% within the basic rate band and 24% above, the same as other residential property.

When must I nominate a main residence?

Within two years of the date your combination of residences changes.

Capital Gains Tax on a second home

Only one property at a time can qualify as your main residence for PRR. A second home or holiday cottage is usually fully chargeable on sale.

Updated for the 2026/27 tax year · Reviewed against HMRC guidance

Basic rate

18%

Higher rate

24%

Annual exempt amount

£3,000

Main residence nominations

If you have two homes that you genuinely live in, you can nominate which is your main residence by writing to HMRC within two years of acquiring the second residence. A well-timed nomination can secure the final 9 months' relief on both.

Furnished holiday lets

The furnished holiday lettings regime was abolished from April 2025, so Business Asset Disposal Relief is no longer available for holiday lets. They are taxed as ordinary residential property.

Married couples

Spouses and civil partners can only have one main residence between them. Joint ownership doubles the annual exempt amount to £6,000 and lets each partner use their own basic rate band.

Frequently asked questions

This guide is general information based on the Taxation of Chargeable Gains Act 1992 and HMRC guidance (including HS283). It is not personal tax advice — for complex cases speak to a qualified tax adviser.