Landlord tax calculator for 2026-27

It isn’t taken off your rent. Instead you get a tax reduction of 20% of the lowest of three figures: your mortgage interest and other finance costs, your rental profit, and your income above the Personal Allowance (not counting savings interest and dividends). So a higher-rate taxpayer still only gets 20% back on their interest. Whatever the reduction can’t use is carried forward to next year. Residential finance costs are not deducted from rental profit; instead a basic-rate tax reduction is given on the lowest of finance costs (plus brought-forward), property profits, or adjusted total income above the personal allowance, with any excess carried forward.

If your gross property income is more than £1,000, you can elect to deduct the £1,000 allowance instead of your actual expenses ('partial relief'). No other expenses are deducted, and the allowance cannot create a loss. If your gross property income for the tax year is £1,000 or less, it is not charged to income tax and the expenses that go with it are not deducted ('full relief'); you do not have to tell HMRC about it. You can elect not to have full relief, for example to claim a loss.

Whichever leaves less tax. You cannot use the property allowance in a tax year in which you claim the basic-rate tax reduction for residential finance costs such as mortgage interest. If you use the allowance, that year's finance costs cannot be carried forward to a later year. So if you have mortgage interest the allowance often loses out, even when your other costs are small. The calculator works out both and picks the one with less tax, counting any interest you could carry forward.

Yes. Put your wages before tax in “Wages from a job”. Income Tax is then worked out on your wages and rental profit together, so your rent is taxed at the rate that applies once it sits on top of your wages, which can push some of it into the 40% band. Your employer takes the tax on your wages through PAYE, so the bill shown is the extra your rent adds.

This calculator doesn’t add any. Rent from letting property is not taxed as the profits of a trade, so Class 4 National Insurance is not usually charged on it. GOV.UK says a landlord may be eligible to pay voluntary Class 2 National Insurance if they count as 'gainfully employed', for example if being a landlord is their main job, they rent out more than one property or they are buying new properties to rent out; otherwise they may be able to pay voluntary Class 3.

Yes, for 2025-26 and 2026-27: tick “I live in Scotland” and Income Tax uses the Scottish bands and rates. The mortgage interest reduction stays at 20%, the UK basic rate.

Property income rates from 2027-28, interest or losses brought forward from earlier years, splitting jointly owned property, holiday lets run with services that count as a trade, the Rent a Room Scheme, property abroad, savings and dividends, pension contributions, student loans, the High Income Child Benefit Charge, capital gains when you sell, and payments on account. Any of these can change your figure.