UK Landlord Tax Calculator
Estimate the Income Tax due on rental profit for a personally owned UK rental property. This calculator includes allowable expenses, the GBP 1,000 property allowance option, brought-forward property losses and the residential mortgage finance cost tax reducer.
Estimate landlord Income Tax
Enter your share of rental income and expenses. If the property is jointly owned, use your own percentage share.
Your wider income
Salary, pension, self-employed profit or other taxable income before rental profit.
Rental income and costs
Interest and finance costs only, not capital repayments.
Property allowance
GBP 1,000
Useful for small property income, but it replaces actual expense deductions.
Finance cost relief
basic rate
Residential mortgage interest usually reduces tax rather than rental profit.
Future change
2027/28
Separate property income rates are announced for England, Wales and NI.
Rental profit is not the same as rental yield
A rental yield calculation tells you whether the property looks like a decent investment. A landlord tax calculation asks a different question: how much of the rental profit is likely to be taxed after your other income, expenses, losses and finance cost relief are considered.
That is why this page asks for your other taxable income. A landlord with GBP 20,000 of salary can have a very different tax result from a landlord with GBP 70,000 of salary, even if they own the same flat and receive the same rent. Rental profit stacks on top of your existing income and can push part of the profit into a higher tax band.
Mortgage interest is another common trap. For most individual residential landlords, finance costs are not deducted from rent in the old way. They usually produce a tax reducer at the basic rate, subject to HMRC's limits. That can make the taxable profit look much higher than the cash profit.
| Input | Why it matters |
|---|---|
| Other taxable income | Sets the band where rental profit starts. |
| Allowable expenses | Reduce rental profit before tax. |
| Finance costs | Usually create a tax reducer, not a profit deduction. |
| Property allowance | Can replace actual expense deductions for small income. |
| Ownership share | Joint owners usually calculate their share separately. |
How this landlord tax calculator works
Inputs used
- Tax year and taxpayer region.
- Other taxable income before rental profit.
- Annual rent, ownership share and allowable expenses.
- Residential mortgage interest or other finance costs.
- Brought-forward property losses used this year.
- Whether to use the GBP 1,000 property allowance instead of actual expenses.
Calculation method
- Calculate your share of rent, expenses, finance costs and losses.
- Work out rental profit before finance costs. If the property allowance is selected, deduct GBP 1,000 instead of actual expenses.
- Stack the taxable rental profit on top of your other taxable income.
- Calculate the extra Income Tax caused by the rental profit using the selected tax year and region.
- Apply the residential finance cost tax reducer where available and show the remaining estimated tax due.
Assumptions
- The estimate is for an individual landlord, not a limited company.
- Mortgage finance costs are residential finance costs that receive a basic-rate tax reducer rather than a deduction.
- The property allowance cannot be combined with actual expenses in this estimate.
- 2027/28 uses announced England/Wales/Northern Ireland property income rates as a forward-looking preview.
- Scottish estimates use Scottish non-savings non-dividend Income Tax bands for current-year rental profit.
What this does not cover
- It does not calculate rental yield or cash flow. Use the Property Rental Yield Calculator for investment yield.
- It does not calculate SDLT, Wales LTT or Scotland LBTT. Use the Stamp Duty Calculator, Wales LTT Calculator or Scotland LBTT Calculator.
- It does not calculate Capital Gains Tax on sale. Use the Capital Gains Tax Calculator for sale/disposal estimates.
- It does not cover company landlords, furnished holiday letting transitional issues, Rent a Room relief, overseas property, partnership allocations, Making Tax Digital obligations, or full Self Assessment liability.
Worked example: salary plus rental profit
Suppose you earn GBP 45,000 from work and receive GBP 14,400 rent from a personally owned flat. You have GBP 3,200 of allowable running expenses and GBP 7,000 of residential mortgage interest.
The taxable rental profit before finance costs is GBP 11,200. That profit is added on top of the salary, so some of it may fall into a higher band. The mortgage interest then gives a tax reducer rather than reducing the rental profit directly.
This is the bit that catches many landlords. A property can feel only modestly profitable in cash terms, but the tax calculation may still show a larger taxable profit because residential finance costs are restricted.
When the property allowance helps
The GBP 1,000 property allowance can be handy for a small amount of property income, perhaps from a parking space, occasional land rental or a low-cost letting arrangement. If your actual allowable expenses are low, the allowance may give a better result.
It is not automatically best for a buy-to-let property with management fees, repairs, insurance and service charges. If you choose the property allowance, you generally do not also deduct your actual property expenses. This calculator lets you switch it on so you can compare the broad effect.
Common landlord tax mistakes
Deducting the full mortgage payment
Capital repayments are not mortgage interest, and most residential finance costs are handled through a tax reducer.
Mixing the property allowance with expenses
The GBP 1,000 allowance is usually an alternative to actual expenses, not an extra deduction on top.
Forgetting joint ownership shares
Couples and joint owners may not all be taxed on 100% of the rent. Use your share unless you are modelling the whole property.
Ignoring future rate changes
Separate property income rates are announced from April 2027, so future rental profit may need a different estimate.
Landlord tax FAQs
Do I need to report rental income to HMRC?
Can I deduct mortgage interest from rental income?
Are repairs allowable expenses?
Does this work for a limited company landlord?
Official sources
Last verified: May 9 2026. Calculations are estimates based on the published rules and assumptions shown on this page.
- GOV.UK tax on rental income - rental income, allowable expenses, property allowance and reporting thresholds
- HMRC working out rental income - property business profits, expenses, losses and residential finance costs
- GOV.UK property and trading income allowances - GBP 1,000 property allowance rules and when it can be used
- HMRC Property Income Manual - technical HMRC guidance on property income and finance cost restriction
- HM Treasury Autumn Budget 2025 property income rates - announced separate property income rates from 6 April 2027
- Scottish Government income tax rates and bands - Scottish non-savings non-dividend rates used for Scottish taxpayer estimates