UK Landlord (Buy-to-Let) Tax Calculator

There's no separate 'landlord tax' — your rental profit (rental income minus allowable expenses) is added to your other taxable income and taxed at your normal Income Tax rates: 20% basic rate, 40% higher rate, or 45% additional rate, depending on which band it falls into once combined with your other income.

No, not directly. Since April 2020, mortgage interest and other finance costs can no longer be deducted when working out your taxable rental profit. Instead, you receive a tax reduction equal to 20% of the lower of your finance costs, your property profit, or your income above the personal allowance — this is the Section 24 restriction.

Because it's capped at the basic 20% rate regardless of your actual tax band. A higher-rate (40%) taxpayer used to get relief at their full marginal rate on mortgage interest; now they get only 20%, effectively increasing their tax bill compared with the old rules, while basic-rate taxpayers see little practical difference.

The first £1,000 of gross rental income each tax year can be covered by the property allowance instead of claiming actual expenses, meaning very small lettings can be entirely tax-free without even filing for that income. It isn't used alongside itemised expenses — you choose whichever gives the better result.

Generally yes, if your rental income is more than £1,000 a year (before expenses) — HMRC requires registration and a Self Assessment return via our sister UK Self Assessment guidance. Landlords with gross rental income over £50,000 (combined with any self-employment income) also fall under Making Tax Digital for Income Tax from April 2026.

It depends on your tax band and portfolio size. A limited company pays Corporation Tax and can fully deduct mortgage interest, which higher-rate taxpayers building a portfolio often find more efficient; personal ownership avoids company running costs (typically £700-£1,500 a year) and can suit basic-rate taxpayers or a single property. Mortgage rates are usually 0.2-0.5% higher for limited-company buy-to-let borrowing, so run the full numbers before switching structure.

Letting agent and legal fees, landlord insurance, repairs and maintenance (not capital improvements), ground rent and service charges, utility bills you pay as landlord, council tax during void periods, and the replacement (not first purchase) of domestic items like carpets or appliances.

Not any more — the separate, more generous furnished holiday lettings regime (which allowed full mortgage interest deduction and capital allowances) was abolished from 6 April 2025. Furnished holiday lets are now taxed under the same rules as standard residential lettings, including the Section 24 finance-cost restriction.

Rental profit counts towards your total income for the personal allowance taper — if your combined income (salary plus rental profit) exceeds £100,000, your £12,570 personal allowance is reduced by £1 for every £2 over that threshold, disappearing entirely at £125,140, which can create an effective 60% marginal rate in that band.

The government has confirmed plans to introduce dedicated rates for property income separate from employment and self-employment income from 6 April 2027, rather than simply stacking rental profit on top of other income at the same marginal rates as today. Details were still being finalised as of mid-2026, so check for updates before that date.

Per landlord (or per person, if jointly owned), not per property — it's a single £1,000 allowance covering all of your UK property income combined, not a separate £1,000 for each rental property you own.

A loss on one UK property is automatically set against profits from your other UK properties in the same tax year; any overall loss can be carried forward to set against UK property profits in future years, but cannot be set against your other income (like salary) in the current year.

For married couples and civil partners, rental income from a jointly owned property is normally split 50/50 for tax purposes regardless of the actual ownership share, unless you file a Form 17 election with HMRC declaring the true unequal ownership split and it matches the legal ownership on the property title.

Yes, if you pay it as the landlord (for example during a void period between tenancies) — Council Tax you pay in that capacity is an allowable expense. If your tenant pays Council Tax directly, it isn't your expense to deduct.

It applies the exact 2025/26 Income Tax bands, personal allowance taper, and the 20% Section 24 finance-cost tax reduction, so it's accurate for a standard individually-owned rental property. It doesn't model limited-company ownership, the £1,000 property allowance as an alternative to itemised expenses, or multiple properties with mixed profits and losses.

Yes for the UK side — the same rules apply to US citizens who own UK rental property. But remember the same rental income must also be reported on your US return, generally using different depreciation and expense rules, so the US and UK figures for the same property rarely match exactly. See our guide on US tax for UK rental income for the US-side rules.

No — it uses the Income Tax rates for England, Wales and Northern Ireland. Scotland sets its own income tax bands (including a 21% intermediate rate and a higher top rate), so a Scottish taxpayer's result would differ from this estimate.

The calculation runs entirely in your browser and nothing is stored unless you choose to download the branded PDF report, at which point you provide your name and email so we can send it. Phone and address are optional.

Yes. Enter your name and email (phone and address optional) and we generate a TaxStone-branded PDF of your rental tax breakdown to download instantly — useful for budgeting or sharing with your accountant.

If you're a higher-rate taxpayer, considering a limited company structure, or filing in both the UK and US on the same property, a review can uncover real savings and keep both returns consistent. Book a free 20-minute call with a TaxStone adviser.