The Chancellor's 2025 Autumn Budget has brought changes to capital gains tax that will affect anyone considering selling an investment property, downsizing, or reshaping their portfolio. Understanding these adjustments is crucial for making strategic decisions about when and how to buy or sell. 

What's changed with capital gains tax 

Basic and higher rates of capital gains tax on property have increased by 2 percentage points each. This adjustment applies to property disposals alongside dividend and savings income, creating a comprehensive shift in investment taxation. 

For property investors who have held assets for several years, these changes affect the post-tax profit from selling. The new rates apply across property investments, meaning careful calculation is essential before putting any property on the market. 

Impact on investment property sales 

If you've been considering selling an investment property, the timing of your sale now carries additional weight. The 2 percentage point increase applies to capital gains from property disposals, affecting the net proceeds you retain after tax. 

This difference becomes more pronounced with higher-value properties or those that have appreciated significantly over time. Properties held for extended periods with substantial capital growth will see a larger absolute impact from the rate adjustment, making post-tax return calculations essential for informed decision-making. 

The changes also affect how you might structure multiple property sales. Rather than selling several properties in one tax year, spreading disposals across different years could help manage your overall tax position, depending on your specific circumstances and other income sources. 

Strategic considerations for buyers and sellers 

For those looking to enter the investment market, these CGT adjustments should inform which properties you target and your intended holding period. Properties with strong long-term growth potential may still deliver solid returns with the adjusted tax rates on eventual sale, whilst those expecting modest appreciation benefit from careful evaluation. 

Investors planning to downsize or consolidate their portfolios have clear information for planning. The tax implications of selling larger properties or multiple smaller ones can be calculated precisely with the 2 percentage point increase factored into projections. Some may find that reinvesting proceeds into alternative property types or structures aligns better with their goals under the adjusted system. 

Planning around the new rates 

Understanding your specific tax position matters for timing decisions. If you've already begun marketing a property, calculating your expected tax liability under the new rates provides direction for pricing and timing considerations. 

Working with a tax advisor who understands property investment helps model different scenarios based on your circumstances. They can project outcomes for various timing options, helping you understand whether proceeding with a planned sale aligns with your objectives or if alternative approaches might better serve your goals. 

Moving forward strategically 

These capital gains tax adjustments mean updated calculations for property investment returns. Investors can adapt by incorporating the new rates into acquisition decisions, considering holding period implications, and planning disposal timing strategically. 

The fundamentals of property investment remain sound for those who plan with current information. The 2 percentage point adjustment to CGT rates creates a clear parameter for calculating returns, enabling informed decisions about which properties to acquire, how long to hold them, and when disposal makes strategic sense. 

With the removal of uncertainty around other potential property taxes, particularly the confirmation of no annual levy on properties above £500,000, investors can focus on actual tax parameters rather than speculative scenarios.

Contact us today to discuss your investment strategy for 2026