The Renters’ Rights Act 2025 became law on 1 May 2026, marking the most significant reform to residential lettings since the Housing Act 1988 and fundamentally changing how private tenancies work in England.
The new law is intended to give the UK renters stronger rights, better protections and more security. Significantly, ‘no-fault’ evictions have been abolished, meaning landlords in the private rented sector won’t be able to evict tenants without a valid reason and fixed contracts have been removed.
Unsurprising, we have noticed that some clients who are landlords have decided that now is the right time to exit the rental market and sell one or more of their properties. This has led to a rise in calls to us about Capital Gains Tax (CGT) when selling a rental property – which often seems like a confusing calculation.
When you sell your rental property, you may be liable for CGT on any profit you make from the sale. The taxable profit is calculated as the difference between the selling price and the purchase price, taking into account any allowable expenses, such as improvement costs. Additionally, if you have lived in the property as your main residence at any point, you may qualify for Private Residence Relief.
There could be other reliefs that may apply. Some clients ask us about Letting Relief but, since April 2020, this only really applies if you shared occupation with the tenant (perhaps, letting out a room in a house where you also lived). Additionally, you might be eligible Entrepreneurs’ Relief, if the property was used for a business.
Calculating your CGT obligations can be complicated. So, if you’re considering selling a rental property, we’d be happy to look at your potential tax liability and explain your reporting obligations. Call us on 01892 513515 if you’ve got any questions.