Should I rent out or sell my UK home?

Your UK home is often your biggest decision before you go. The UK keeps taxing UK rent and property gains after you leave, and once you are a US tax resident the US taxes them too, with credit for the UK tax.

Your three choices

Letting it out

• If you have a mortgage, you must get your lender’s permission before you let the home
• In England you must protect the tenant’s deposit in a government-approved scheme, keep gas and electrics safely installed and maintained, provide an Energy Performance Certificate and check the tenant’s right to rent
• A letting agent can manage the property and the tax deductions while you’re away

England’s Renters’ Rights Act 2025 changed the rules on 1 May 2026. Section 21 “no fault” evictions have ended and tenancies are now rolling (periodic), with no end date. If you want to sell or move back in, you can’t use those grounds in the first 12 months of a tenancy, and the notice period is often 4 months. A national database of private landlords is due to start rolling out from late 2026, with a yearly fee, followed by a landlord ombudsman. Scotland, Wales and Northern Ireland have their own rules.

The Non-Resident Landlord Scheme

If you live abroad for more than 6 months a year, you are a non-resident landlord. Your letting agent (or your tenant, if the rent is over £100 a week and there is no agent) must take basic-rate income tax off the rent and pay it to HMRC each quarter, unless HMRC has told them in writing that you can get the rent with no tax taken off.

• You still declare the rent on a UK Self Assessment return
• British citizens keep the UK Personal Allowance as non-residents, which can cover some or all of the rent
• Keep records of rent and expenses for both countries’ returns

US tax on your UK rent

• A US tax resident reports UK rent on Schedule E of the federal return, converted to dollars
• The US requires you to depreciate the building (not the land). Property used mostly outside the US must use the slower “alternative depreciation system”, and depreciation reduces your US cost base when you sell
• You claim a foreign tax credit (Form 1116) for UK tax on the same rent, so you don’t usually pay twice
• Your state may tax the rent too, and states don’t always give the same credit

Selling, from either side of the Atlantic

If you sell after you have become non-UK resident, you must report the sale to HMRC within 60 days of completion, through an online Capital Gains Tax on UK property account. You must do this even if there is no tax to pay or you made a loss. Private Residence Relief may cover the time it was your main home. See Do I still pay UK tax?

The treaty lets the UK tax gains on UK property even when you live in the US, and the US taxes a resident’s worldwide gains, with credit for UK tax. If you owned the home and lived in it as your main home for at least 24 months of the 5 years before the sale, you can usually exclude up to $250,000 of gain (about £189,400), or $500,000 for a married couple filing jointly. The US works out the gain in dollars, so a change in the exchange rate can create a gain even if the pound price didn’t rise. Paying off a sterling mortgage is treated as a separate currency transaction (“section 988”), which can create its own taxable gain. Get advice from a UK–US tax adviser before you exchange contracts.

Council tax

A tenant who lives in the home usually pays the council tax. If you leave it empty or keep it as a second home in England, you will usually still pay. Councils can charge up to double for second homes. After a home has been empty for a year, they can add a premium, rising to up to 4 times the normal bill for homes empty 10 years or more.