Rental income tax calculator UK (2025/26): how much tax will you pay?
One-line answer. UK landlord tax for 2025/26 is calculated by adding rental profit (rents minus allowable expenses, excluding mortgage interest) to your other income, taxing the total at standard income-tax bands, then subtracting a 20% credit on mortgage interest. Use the calculator below for an estimate. For most one-property accidental landlords with a mortgage, the answer will be smaller than they fear and bigger than they hope.
This page walks through:
- The free calculator and how to use it
- The exact 2025/26 maths it runs
- Three worked examples (basic-rate, higher-rate, additional-rate)
- The traps the calculator catches that spreadsheets miss
- Allowable expenses you can claim
- When you do (and don’t) need to file SA105
Calculator results are an estimate only. Personal circumstances (other income, joint ownership, prior-year losses, FHL transitions) can change the answer materially. Always cross-check with HMRC or a qualified accountant before filing.
Use the calculator
Calculator placeholder — to be replaced with the live
<rental-income-calculator>Vue component embedded on the live page. Inputs: gross annual rent, allowable expenses (excluding mortgage interest), mortgage interest, employment/pension/other income, country of residence (England/Wales/NI vs Scotland), filing year. Outputs: property profit, total taxable income, income tax breakdown by band, Section 24 reducer, estimated tax due on the rental property only, and total household tax.
The calculator runs in your browser. Nothing is sent to a server. No sign-up required.
The exact 2025/26 maths
UK income tax bands (England, Wales, Northern Ireland — Scotland is different):
| Band | Range | Rate |
|---|---|---|
| Personal allowance | First £12,570 | 0% |
| Basic | £12,570 – £50,270 | 20% |
| Higher | £50,270 – £125,140 | 40% |
| Additional | over £125,140 | 45% |
The personal allowance tapers down by £1 for every £2 earned over £100,000 — gone entirely at £125,140.
The five-step calculation
- Gross rental income received in the tax year (6 April 2025 → 5 April 2026).
- Subtract allowable expenses — everything except mortgage interest. This is your taxable property profit.
- Add the property profit to your salary, pension, and other income → total taxable income.
- Calculate income tax the normal way using the bands above.
- Subtract 20% of mortgage interest (and other finance costs) from the tax bill — the Section 24 “tax reducer”.
The figure on your rental-property-only line is the tax difference between (a) your full bill with the property included and (b) what your bill would have been without the property.
Worked example 1 — basic-rate landlord
Inputs
- Gross rent: £14,400
- Allowable expenses (excl mortgage interest): £2,400
- Mortgage interest: £6,000
- Employment income: £18,000
Calculation
- Property profit: 14,400 − 2,400 = £12,000
- Total taxable income: 18,000 + 12,000 = £30,000
- Less personal allowance £12,570 = £17,430 taxable
- Tax at 20% = £3,486
- Section 24 reducer: 6,000 × 20% = £1,200
- Total tax: 3,486 − 1,200 = £2,286
- Tax without the property would have been: (18,000 − 12,570) × 20% = £1,086
- Tax attributable to the property: £1,200
Net rental cash flow: 14,400 − 2,400 − 6,000 − 1,200 = £4,800/year (£400/month) before any capital repayment on the mortgage.
Worked example 2 — higher-rate landlord (where Section 24 bites)
Same property, but the landlord earns £62,000 in their day job.
- Property profit: £12,000
- Total taxable income: 62,000 + 12,000 = £74,000
- Top £23,730 sits in the 40% band; the property profit is entirely in that band
- Extra tax from the property profit: 12,000 × 40% = £4,800
- Section 24 reducer: 6,000 × 20% = £1,200
- Tax attributable to the property: £3,600
The same property costs this landlord 3× more in tax than a basic-rate landlord. That is what Section 24 does.
Worked example 3 — the basic-to-higher-rate trap
A landlord earning £40,000 in their day job, same property.
- Pre-Section 24 (old rules): property profit was £6,000 (after deducting interest), total income £46,000 — comfortably basic rate.
- Under Section 24: phantom property “profit” is £12,000, total income £52,000.
- Top £1,730 of property income is now in the 40% band.
- Net effect: about £346 of extra tax purely because Section 24 inflates phantom income that didn’t exist in cash.
If you’re within £10,000 of the higher-rate threshold and have a mortgage, the calculator will spot this for you.
Allowable expenses (the things you can actually deduct)
The big ones, all subtracted in step 2 above:
- Repairs and maintenance — like-for-like fixes (replacement boiler same spec, gutter clean, redecoration, drain unblock, gas safety check, EICR).
- Letting agent fees and commissions.
- Accountant and tax-software fees for the rental business.
- Buildings and contents insurance, landlord insurance.
- Council tax and utilities during a void period (when the landlord is liable).
- Service charges and ground rent paid to a freeholder.
- Advertising the property (Rightmove, Zoopla listings).
- Mileage to inspect the property (45p/mile to 10,000 miles, 25p after).
- Legal fees for re-letting (not for purchase or sale — those are capital).
What is not allowable (these don’t go in step 2):
- Mortgage interest — handled separately at the 20% credit step.
- Capital repayments on the mortgage — never deductible, just paying down debt.
- Improvements — new kitchen of higher spec, extension, double glazing where there was single, loft conversion. These add to the property’s CGT base instead.
- Stamp duty, conveyancing on purchase, surveyor on purchase — capital, CGT base.
- Personal expenses mixed in by accident on a shared bank account.
Full list of allowable expenses →
Replacement of domestic items relief (separate from box 25)
Replacing a moveable item provided to the tenant — sofa, fridge, washing machine, carpet, curtains — is not a normal repair. It claims a separate “Replacement of Domestic Items Relief”. The deduction equals the cost of the new item, capped at the cost of an equivalent replacement (so upgrading from a £200 fridge to a £600 American-style fridge only gets you a £200 deduction).
The calculator handles this in a separate input field. Don’t lump it into “repairs” — HMRC treats it differently and the SA105 form separates it out.
When you must file SA105
You must declare rental income if:
- Your gross rental income (before expenses) is over £1,000 in the tax year, or
- You make a loss you want to carry forward, or
- HMRC has sent you a notice to file.
The £1,000 figure is the Property Income Allowance. If your gross rents are below it, you don’t have to declare. If they’re above it, you choose between the £1,000 allowance OR your actual expenses — whichever is bigger.
You file via the SA105 supplementary page, attached to your main Self Assessment return (SA100). Deadlines:
- Paper return: 31 October following the end of the tax year (so 31 Oct 2026 for 2025/26).
- Online return: 31 January following (so 31 Jan 2027 for 2025/26).
- MTD ITSA: from April 2026, landlords with combined SE+rental income above £50,000 must submit quarterly digital updates instead of an annual return.
Joint property: how to split the calculation
By default, joint property is split 50/50 between owners regardless of who actually receives the rent. Married couples and civil partners can elect a different split (Form 17), but only if it matches actual beneficial ownership, and only for property held as tenants in common.
The calculator assumes 50/50 split. If your share is different, run the calculator twice with each share’s figures.
What the calculator does NOT cover
- Furnished Holiday Lets pre-April 2025 — different rules, now abolished.
- Property held in a limited company — that’s corporation tax via CT600, not income tax.
- Non-resident landlords — different withholding rules.
- Rent-a-room scheme — separate £7,500 allowance, different return path.
- Capital gains when you sell.
- Scottish income tax bands if you’re Scottish-resident — supported via the country selector but verify against current ScotGov bands.
- Welsh income tax bands — currently identical to England/NI but governed separately.
How LetLedger uses this calculator
If you upload your bank statement to LetLedger, the calculator runs automatically. Every transaction is tagged to its SA105 box, the figures populate the calculator, and you see your estimated tax in seconds — not after a January weekend of spreadsheet wrestling. The estimate updates as you correct any mis-categorised rows.
FAQ
How much tax will I pay on £15,000 of rental income? Depends on your other income. If you earn nothing else, the tax could be near zero (covered by the personal allowance). If you earn £50,000+, the same £15,000 of profit could cost you £6,000+ in tax. Use the calculator above with your real numbers.
Do I need to declare rental income under £1,000? No — the Property Income Allowance covers gross rents up to £1,000. Above that, you must file SA105.
Is mortgage interest deductible from rental income? Not as a deduction. You instead get a 20% tax credit on the interest (Section 24). For basic-rate taxpayers the maths is identical; for higher-rate it costs you. See Section 24 explained for the full detail.
Can I use this calculator for 2024/25? The calculator defaults to 2025/26 but supports prior years via the year selector. Bands and the personal allowance change each year.
Does the calculator handle Scottish income tax? Yes — select “Scotland” in the country dropdown to use ScotGov’s bands.
What about MTD ITSA? The calculation itself doesn’t change under MTD, but your filing process does — quarterly digital updates instead of one annual return. See MTD ITSA for landlords.
Can I trust the result? The calculator is accurate for straightforward cases (single property, simple income, England/Wales/NI). Edge cases — joint ownership with non-50/50 split, multiple properties with mixed losses, prior-year carry-forward credits — need an accountant. Treat the figure as a sanity-check, not a final number.
This article and calculator are for guidance only. They are not personal tax advice. Tax rules change. Always verify the current position with HMRC or a qualified accountant before filing.