About the UK Rental Income Tax Calculator
This calculator works out the extra income tax you pay on rental profits from a UK residential property in the 2026/27 tax year. Rental profit is added to your other income (salary, pension, self-employed profit) and taxed at your marginal rates, so the same rent can cost a basic-rate landlord 20% and a higher-rate landlord 40% or more.
Since Section 24 was fully phased in, individual landlords cannot deduct mortgage interest and other finance costs from rental income. Instead they get a tax credit of 20% of the lowest of their finance costs, their property profit, or their adjusted total income above the personal allowance. The calculator applies this, shows how much more you pay than under the old full-deduction rules, and lets you compare the £1,000 property allowance with actual expenses.
It is for individual landlords letting residential property in their own name, in England, Wales, Northern Ireland or Scotland. It assumes your other income is non-savings income (employment or pension), ignores brought-forward losses and finance costs, and does not apply to properties held in a limited company. The separate furnished holiday let regime was abolished from April 2025, so holiday lets now follow these same rules.
With the default inputs, the income tax on rental profit is £3,746.00. Change any value above to recalculate instantly.
How to use the uk rental income tax calculator
- 1Enter the total rent received in the tax year.
- 2Enter allowable running costs, keeping mortgage interest separate.
- 3Enter mortgage interest and other finance costs.
- 4Add your salary, pension or other taxable income and choose your region.
- 5Read the tax on your rental income and the Section 24 cost.
Formula and method
Rental profit is rent less allowable expenses such as letting agent fees, repairs, insurance and service charges — but not mortgage interest, which Section 24 excludes for individual residential landlords. The profit is added to your other income and taxed at your marginal rates using the 2026/27 bands (20%, 40% and 45%, or the Scottish 19%–48% bands), with the personal allowance tapered above £100,000.
You then get a basic-rate tax reduction of 20% of the lowest of your finance costs, your property profit and your adjusted total income above the personal allowance. Any finance costs not relieved because of the profit or income limits carry forward. The comparison figure shows the tax if interest were fully deductible, as before April 2017. Choosing the £1,000 property allowance replaces all expenses and removes the finance cost credit.
- credit
- Section 24 basic-rate tax reduction
- tax(x)
- UK income tax on non-savings income x
Worked examples
Higher-rate landlord with a mortgage
Rental profit of £15,000 takes total income to £60,000. Tax rises from £6,486 to £11,432 (£4,946), less a £1,200 credit (20% of £6,000 interest) = £3,746. Deducting interest in full would have cost £2,546, so Section 24 adds £1,200.
Basic-rate landlord
Profit of £10,000 stays inside the basic-rate band, so it costs £2,000 at 20%, less an £800 credit = £1,200. For basic-rate landlords the 20% credit is worth the same as a deduction.
Small letting income using the property allowance
With low costs, the £1,000 property allowance beats £300 of actual expenses. Taxable profit is £1,400, costing £280 at 20%.
Frequently asked questions
How is rental income taxed in the UK?+
Rental profit (rent minus allowable expenses) is added to your other income and taxed at your normal income tax rates. It is not subject to National Insurance unless you run a property business that HMRC treats as trading.
What is Section 24?+
Section 24 of the Finance (No. 2) Act 2015 stopped individual landlords deducting mortgage interest from residential rental income. Since April 2020 they instead get a tax credit of 20% of finance costs, which costs higher and additional-rate landlords more tax.
Can I use the £1,000 property allowance and claim expenses?+
No. If your rental income is over £1,000 you can either deduct actual allowable expenses or deduct the £1,000 property allowance, but not both, and the allowance cannot be combined with the finance cost tax reduction.
Do I need to register for Self Assessment as a landlord?+
You must tell HMRC if your rental income is over £1,000 a year. Most landlords then report it on a Self Assessment return, although smaller profits can sometimes be collected through your PAYE tax code instead.
Are property income tax rates changing?+
At the November 2025 Budget the government announced separate property income rates of 22% (basic), 42% (higher) and 47% (additional) from April 2027 in England, Wales and Northern Ireland, and the government will discuss with the Scottish and Welsh governments whether to set their own property rates. For 2026/27, rental profit is still taxed at the normal rates used here.
Does Section 24 apply to limited companies?+
No. Companies deduct mortgage interest as a normal business expense and pay corporation tax on the profit, which is one reason some landlords incorporate — though transferring property into a company can trigger stamp duty and capital gains tax.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.