Should I sell my buy-to-let? Hold vs sell calculator UK

Worked example

A property worth £320,000, bought for £250,000 with £10,000 of SDLT, with £187,500 still owed. Selling today releases £114,572 after £6,400 of selling costs, repaying the mortgage and £11,528 of capital gains tax. Invested at 5% a year after tax, that becomes £146,226 in 5 years.

Holding instead produces -£336 of after-tax rental cash over 5 years (each year's amount reinvested at the same 5%), then a sale releasing £152,517. Total: £152,036.

Holding comes out £5,810 ahead. The answer flips if the money could earn more than 5.8% a year after tax elsewhere.

Why most hold-or-sell calculators get this wrong

A common shortcut compares the cash from selling today with the rent you would collect by holding. That compares a lump sum that includes your equity with an income stream that ignores the property you would still own — so selling nearly always "wins". A fair comparison needs both paths to end on the same date with everything turned into cash: repay the mortgage in both, pay the tax in both, and give the sale money a chance to grow at a realistic after-tax return.

If you would live in it instead

Selling isn't the only alternative to letting. If you are weighing moving back in, OwnerCost works out the monthly cost of owning a home you live in, including stamp duty and the break-even on a remortgage.

How the tax is worked out

Capital gains tax on a sale is charged on the gain above your purchase price plus allowable costs (SDLT, legal fees, improvements), after the £3,000 annual exempt amount. The rate is 18% on the part that fits in your unused basic-rate band and 24% above it (GOV.UK). Rental profits while you hold are taxed under Section 24 with your other income, exactly as in the after-tax calculator.

What this calculator does not include

• Private residence relief or lettings relief if you once lived in the property.
• Improvements you could deduct from the gain — add them to the price you paid.
• The 60-day deadline and payment on account of CGT on UK residential property (a timing, not an amount, issue).
• Transfers to a spouse or a limited company before sale.

Questions landlords ask

Is it better to sell a buy-to-let before April 2027?

Rental profits face higher property rates from 2027/28, but CGT rates are not part of that change. Use the calculator with your own figures; the answer depends mostly on growth, your mortgage rate and what the money would earn elsewhere.

What return should I use for the alternative?

Something you would realistically earn after tax — for example inside an ISA or pension, or a cautious figure for a general investment account. The break-even return shows how sensitive the decision is.

Does selling always repay my mortgage?

Yes. Both paths repay the loan when the property is sold; the calculator uses your balance today and the projected balance at the end.