© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Question
Dear Sir,
My wife and I are retired and have two flats in London. We lived in a flat for 20 years then three years and two months ago I bought a second flat and after three months of works we moved into it and paid full council tax on this property, and half council tax on the empty, untenanted property we left behind. We could not sell the property for the sum we wanted over the past three years, and it has been on the market all that time.
If we sell the first property I have been told I may have to pay CGT upon sale as I have not lived in it for more than three years.
Is this true? Surely as our first property has been untenanted and on the market and was our only and principal residence for 20 years prior to moving out, we will not have to pay CGT? Also in that time the asset value has dropped from £640,000 to £560,000 with no sensible offers in sight.
We are now considering moving back in to the first flat and making that our principal residence once again (how long would we have to reside there to annul CGT?) but we really don’t want to do that if possible.
Is there any way out of this problem, or are we liable for a CGT bill, and if so, how much? There is no mortgage against either property.
ANSWER
Selchouk Sami, of Stennett and Stennet solicitors, answers: ‘So long as exchange of contracts for the sale of the first flat takes place within three years of electing the second flat as your principal residence, no CGT liability arises.
If you decide to move back to qualify for the exemption, you must establish a degree of permanence and expectation of continuity is required for the exemption to be claimable. A short period of residence of a few months may not qualify for relief.
Depending on how long the sale of the first takes to exchange contracts, there might be no need to move out of the second flat unless the sale is likely to become protracted, in which case you may need to consider whether you should re-elect the first flat as your principal residence.
I would strongly advise that you discuss the issues I have raised with your accountant to ensure that you know what your CGT liability will be.’