Private Residence Relief: The 9-Month and 6-Year Rules Explained

Private residence relief (PRR) removes Capital Gains Tax from the gain on a property that has been your only or main home. If it was your main home for the whole time you owned it, the gain is fully exempt; if it was your home for only part of that time, the gain is split month by month and only the qualifying slice is relieved — with the final 9 months of ownership always counting as qualifying, whatever you were doing with the property by then.

There is one point worth settling immediately: the UK does not have a "6-year rule". That is an Australian rule, and searches for it in a UK context almost always land on the wrong answer. The UK equivalents are a set of "periods of absence" — three years for any reason, four years for work elsewhere in the UK, and an unlimited period while working abroad — each of which is treated as if you were still living there.

Key points

• Full relief applies when the property was your only or main residence throughout ownership, including garden and grounds up to half a hectare.
• The last 9 months of ownership are always treated as a period of residence (36 months if you are disabled or move into a care home).
• There is no UK 6-year rule. Instead, absences of up to 3 years (any reason), up to 4 years (work duties in the UK) and unlimited periods working abroad can be deemed occupation.
• Deemed-occupation periods normally require that the property was your main home both before and after the absence.
• Relief is time-apportioned in months, so the arithmetic matters more than the label.

Full relief: when the whole gain escapes tax

You get complete relief if the property was your only or main residence for the entire period of ownership. In practice that means you moved in when you bought it, lived there as your home, and sold it without a long gap of non-residence in between. There is nothing to report and nothing to pay.

The relief also covers the "permitted area" of garden and grounds — up to 0.5 of a hectare including the site of the house, or more if HMRC accepts the larger area is required for the reasonable enjoyment of the property given its size and character. Land sold separately after you have already sold the house does not qualify.

How long do you have to live in a property to avoid CGT?

There is no minimum period written into the legislation. What matters is the quality of the occupation, not its length: HMRC looks for evidence that you occupied the property with some degree of permanence, continuity and expectation of continuity. A few weeks in a property you were always going to sell will not create a residence; a genuine home that circumstances forced you to leave after five months can.

Useful evidence includes where you were registered for council tax and on the electoral roll, where utility bills and bank correspondence went, where your furniture was, and where your children went to school. Buying, refurbishing and selling a series of properties in quick succession also risks being treated as a trade, in which case the profit is income rather than a capital gain and PRR is irrelevant.

The final 9 months

The last 9 months of ownership always count as a qualifying period of residence, provided the property was your only or main residence at some point during your ownership. This exists so that people are not penalised for the gap between moving out and completing a sale.

Two details are easy to get wrong:

• The 9 months run to the date of disposal — normally the date of exchange of contracts, not completion.
• The period used to be 18 months and was cut to 9 months for disposals from 6 April 2020. Older guides and older worked examples still use 18, so check the date of anything you read.

The final period is extended to 36 months if you are a disabled person or a long-term resident of a care home, subject to conditions on not owning another property that qualifies for relief.

The "6-year rule": the UK absence rules explained

If you have read about a 6-year rule, you have almost certainly read about Australia, where a former main residence can generally be treated as your main residence for up to six years while it is rented out. The UK has nothing equivalent. Letting a UK property out does not extend your relief; it simply creates a non-qualifying period, softened only by the final 9 months.

What the UK does have is a list of periods of absence that are treated as periods of occupation:

The three categories can be combined. Someone who lived in their home, spent four years working abroad, came back for a year, then spent three years living elsewhere for personal reasons before returning could have the whole of that period covered.

The reoccupation condition

This is where most claims fail. For an absence to count, the property must normally have been your only or main residence at some point before the absence and again after it. If you move out, let the property and never live in it again, the absence rules give you nothing — you are left with the final 9 months.

There is a long-standing relaxation where the reason you cannot return is that your job requires you to live somewhere else, so HMRC accepts the relief even though you never reoccupy.

Delays moving in, and job-related accommodation

If there is a gap at the start of ownership because you were building, renovating or waiting to sell your previous home, HMRC has historically allowed up to 24 months of that gap to be treated as a period of residence.

Separately, if you live in accommodation provided because of your job (armed forces, some clergy, pub landlords and similar), a property you own and intend to occupy as your main home can be treated as your residence while you are in that job-related accommodation.

Worked example: absences and a letting period

Assume a flat bought in September 2014 and sold in September 2026 — 144 months of ownership — for a gain of £144,000, so £1,000 of gain per month.

• Sept 2014 to Sept 2017: lived in as only home — 36 qualifying months.
• Sept 2017 to Sept 2022: seconded abroad, duties performed wholly outside the UK — 60 qualifying months under the working-abroad rule.
• Sept 2022 to Sept 2024: returned and lived there again — 24 qualifying months (this return is what unlocks the 60 months above).
• Sept 2024 to Sept 2026: let to tenants — 24 months, of which the final 9 qualify.

Qualifying months: 36 + 60 + 24 + 9 = 129. Non-qualifying: 144 − 129 = 15.

Chargeable gain: £144,000 × 15/144 = £15,000. After the £3,000 annual exempt amount, £12,000 is taxable. For a higher-rate taxpayer at 24% that is £2,880. Had the owner never moved back in after the secondment, the 60 months abroad would have been non-qualifying too, giving a chargeable gain of £75,000 instead.

Letting part of your home, or letting the whole of it

Letting out the property changes the sums in two different ways depending on whether you are there.

Letting the whole property after you move out. Those months are simply non-qualifying, apportioned as above. Lettings relief, which used to give up to £40,000 of extra relief, was restricted for disposals from 6 April 2020 so that it now only applies where the owner was in shared occupation with the tenant.

Letting a room while you still live there. Taking in a lodger does not normally disturb your relief, and the rental income itself can be covered by the Rent-a-Room scheme up to £7,500 a year. Relief is only restricted where part of the property is used exclusively for something other than your home — for example a self-contained annexe let out permanently, or a room used wholly and exclusively for business.

Worked example: a rented-out former home

Bought August 2014 for £220,000, lived in for 60 months, then let out until sale in August 2026 for £400,000. Ownership is 144 months and the gain is £180,000, or £1,250 a month.

• Qualifying: 60 months of residence + final 9 months = 69 months.
• Relieved gain: £180,000 × 69/144 = £86,250.
• Chargeable gain: £93,750, less the £3,000 annual exempt amount = £90,750 taxable.

If the owner has no basic-rate band left, the tax is £90,750 × 24% = £21,780. If instead £10,000 of the basic-rate band (which runs to £37,700 of taxable income) is unused, £10,000 is taxed at 18% (£1,800) and £80,750 at 24% (£19,380) — £21,180 in total. Selling in joint names would bring a second annual exempt amount and a second basic-rate band into play.

Two homes: nominating your main residence

You can own several properties but only one can be your main residence at a time. If two or more are residences — meaning you actually live in each of them, not just own them — you can nominate which is treated as the main one. The nomination must generally be made in writing to HMRC within two years of the date on which the combination of residences changes.

Three practical points:

• A property you have never lived in cannot be nominated. A holiday let you have never occupied as a home is not a residence.
• Married couples and civil partners living together can only have one main residence between them, and any nomination must be signed by both.
• Once a valid nomination is in place it can be varied, and a variation can be backdated up to two years — which is why nominating early is more valuable than nominating well.

Capital Gains Tax is not devolved, so Scottish and Welsh taxpayers use the same 18% and 24% rates, the same £3,000 annual exempt amount and the same UK-wide £37,700 basic-rate band for CGT purposes, even though their income tax bands differ.

Reporting and paying

If the whole gain is covered by private residence relief there is nothing to report. If any of it is chargeable, a UK residential property disposal must be reported and the tax paid within 60 days of completion using the HMRC Capital Gains Tax on UK property service, and reported again on a Self Assessment return if you file one. Keep the dates you moved in and out, plus the evidence behind them, for at least as long as you keep the property records — the apportionment stands or falls on those months.

What to do next

Work out the months first, then the money. Count your total months of ownership from purchase to exchange, mark each month as qualifying or not, add the final 9, and apply the fraction to the gain. Then run the numbers through the Capital Gains Tax on property calculator to see the bill at 18% and 24% against your remaining basic-rate band, and check HMRC's own guidance on tax when you sell your home if your history includes long absences or a second residence.