Home / Glossary / Lettings Relief
What is Lettings Relief?
Last verified 23 October 2026
Lettings Relief is a Capital Gains Tax relief for people who sell a home they lived in while letting part of it to a tenant. It can reduce the gain on the let part of the home.
Why it matters to landlords
Since 6 April 2020 it only applies if you lived in the property at the same time as your tenant, with part of the home as your only or main residence and another part let as residential accommodation. It does not cover any period when the whole property was let out, and it does not cover gains while the home was empty. A landlord who moved out and let the whole house therefore gets no Lettings Relief.
The relief is the lowest of three amounts: the Private Residence Relief you get on the property, £40,000, or the part of the chargeable gain that relates to the let part of the home. If you sell a UK home and still have Capital Gains Tax to pay after reliefs, the 60 day reporting rule can apply.
Example
You sell a house you lived in while letting one room to a tenant. Private Residence Relief is £60,000 and the gain on the let part is £25,000. Lettings Relief is £25,000, the lowest of £60,000, £40,000 and £25,000.
Capital Gains Tax calculator →
Related terms
- Private residence relief
- Capital Gains Tax (CGT)
- Rent a Room scheme
- Lodger
- 60 day Capital Gains Tax reporting