Rental income tax calculator
Letting out a property in the UK? Enter your share of the rent, your allowable expenses and your mortgage interest to estimate your taxable rental profit, the 20% finance-cost tax credit, and whether the £1,000 property allowance or your actual expenses leaves you with less tax. Uses 2026-27 income tax bands for England, Northern Ireland and Wales.
How this is worked out
- Actual expenses route: rental profit = rent − allowable expenses. Residential mortgage interest is not deducted. Instead you get a tax credit of 20% of the lowest of: your finance costs, your property profit, and your income above the Personal Allowance. It can't create a refund, and any unused finance costs carry forward to next year.
- Property allowance route: deduct up to £1,000 from your gross rent instead of any expenses. You can't claim the finance-cost credit in the same year, and the allowance can't create a loss. Joint owners each get £1,000 against their own share.
- Income tax: Personal Allowance £12,570 (reduced by £1 for every £2 over £100,000), then 20% up to £50,270, 40% up to £125,140 and 45% above. The calculator shows the extra tax your rental profit adds on top of your other income.
- Allowable expenses include repairs and maintenance (not improvements), letting agent fees, insurance, ground rent and service charges, council tax and utilities you pay, cleaning or gardening, accountant's fees, advertising and like-for-like replacement of domestic items such as beds, carpets or fridges.
- Telling HMRC: if your property income is over £1,000 up to £2,500, contact HMRC; if it's over £2,500 after expenses or £10,000 before, you need a Self Assessment tax return.
- Making Tax Digital for Income Tax: if your gross self-employment and property income (your share) is over £20,000 in 2026-27, you'll need to use it from April 2028 (over £50,000 in 2024-25 meant April 2026; over £30,000 in 2025-26 means April 2027).
Not modelled: commercial lets (their mortgage interest is a normal expense), losses brought forward, savings and dividend income, Rent a Room. From 6 April 2027 GOV.UK says property income will have its own rates (22% / 42% / 47%) with a 22% finance-cost credit. Scotland has different income tax bands, so the tax figure is a guide there; the 20% credit is the same UK-wide.
Sources: GOV.UK: work out your rental income, property allowance, tax relief for residential landlords, renting out a property: paying tax, Making Tax Digital for Income Tax, income tax rates, mygov.scot finance cost relief. Checked 16 October 2026.
Keep the whole year in a spreadsheet
The UK Landlord Rental Income & Expenses Tracker logs rent, expenses and mortgage interest for up to 5 properties (with joint-ownership shares), totals them per property and per month, and runs this same allowance-vs-expenses comparison for you. It's coming to the Tidy Sheets shop soon.
Visit the shopNew to letting? Read the landlord rental income tax guide. Also self-employed? Work out how much to put aside with the free tax set-aside calculator, or read the tax set-aside guide. Driving to your properties? Try the HMRC mileage allowance calculator.