Selling a new-build property you bought from a developer is, in most respects, the same as selling any other residential property for CGT purposes. The gain is proceeds minus cost, the 60-day return applies if there is a chargeable gain, and Private Residence Relief covers periods of main-home occupation.
That said, new-build purchases have a few specific characteristics that affect the CGT calculation.
The base cost includes everything paid to the developer
The base cost for CGT includes:
- The purchase price paid on completion
- Any reservation fee paid before exchange (if this is part of the total consideration, rather than a refundable deposit that was returned)
- Any extras or upgrades paid to the developer beyond the standard specification
- Solicitor's fees and SDLT on the purchase
- Survey or snagging inspection costs if capitalised
Developer incentives — such as cashback payments, furniture packs paid for by the developer, or stamp duty contributions — generally reduce the base cost if they reduce the effective price paid. The net cost to you is the allowable base cost.
The new-build premium
New-build properties typically sell at a premium above comparable second-hand stock in the same area. This premium tends to erode quickly — many new builds fall in value in the first few years relative to equivalent older properties as the new-build status wears off.
If you sell a new-build property within the first few years for less than you paid, you may have a loss, not a gain. A loss does not trigger the 60-day return obligation (for UK residents) and can be used to offset gains elsewhere.
Help to Buy equity loan
If you purchased through the Help to Buy equity loan scheme, the government holds a percentage equity stake in the property. When you sell:
- You repay the government's equity stake (a percentage of the market value at the time of sale, not the original loan amount)
- Your CGT proceeds are the total sale price, not the net amount after repaying the government
- The original Help to Buy loan is not an acquisition cost — you effectively acquired the full property at the full price, using the government loan to part-fund it
- The government repayment is a return of capital on disposal, not a deduction from proceeds
This means the CGT gain can be larger than the cash you actually receive after repaying the Help to Buy stake. Many Help to Buy sellers are surprised by this.
Shared ownership
Shared ownership is a different structure from Help to Buy. If you own a 50% share in a property and sell your 50% share, you are disposing of a 50% interest. The proceeds are your 50% share's sale price (not the full market value of the property), and the base cost is 50% of the original purchase price plus your acquisition costs on that share.
Staircasing — buying additional shares — increases your ownership proportion. Each staircasing event is a separate acquisition at the price paid for that additional share.
PRR on a new-build purchased as an investment
If you bought a new-build specifically to let and have never occupied it as your main home, PRR does not apply. The full gain is taxable.
If you occupied the property for part of the ownership period and then let it, PRR covers the occupation periods proportionally plus the last nine months. The remaining period is not covered unless lettings relief applies (which requires you to have been in shared occupation with tenants since April 2020).
The 60-day obligation
The same 60-day return rules apply as for any other residential property sale. If there is a chargeable gain after reliefs, the return must be filed within 60 days of completion and tax paid at the same time.
If you are selling a new-build property and have a chargeable gain — or are unsure whether you do — start your return at LetsFile. The Chartered Accountant/Chartered Tax Advisor calculates the gain including all allowable base costs and checks whether PRR or other reliefs apply.