Landlord Tax Calculator UK
Work out the tax on your rental income and your real profit after tax. This calculator applies the Section 24 rules, so mortgage interest is treated as a 20% tax credit, not an expense, which is what catches out higher rate landlords.
Total rent received across your properties in the year.
Repairs, letting agent fees, insurance, service charges, ground rent. Not mortgage interest.
Interest and finance costs only, not capital repayment.
Salary, pension, or self-employment income. This sets the tax band your rental profit falls into.
How this works: rental profit for tax is your rental income minus allowable expenses, but mortgage interest is not an allowable expense. Under Section 24, finance costs instead give a 20% tax reducer on the lower of your finance costs, your rental profit, or your income above the personal allowance. Your rental profit is taxed on top of your other income at 20%, 40%, or 45% for 2026/27 (England, Wales and Northern Ireland), with the 12,570 personal allowance tapered above 100,000. Scotland has different bands and is not covered. This is a free estimate from Rentalize, not tax advice, and it ignores the 1,000 property allowance, capital allowances, and joint ownership splits. Confirm with HMRC or an accountant.
Section 24 and the mortgage interest trap
Since 2020 landlords cannot deduct mortgage interest from rental income. This is the single biggest reason a mortgaged buy to let can show a paper profit yet leave little cash after tax.
Interest is not an expense
Your taxable profit is rent minus running costs, with mortgage interest added back in. So you are taxed on income you spent on the loan. A landlord with high borrowing can be taxed on more than they actually keep.
A 20% credit instead
In place of the deduction, you get a tax reducer worth 20% of your finance costs. For a basic rate taxpayer this roughly matches the old relief. For a 40% or 45% taxpayer it is worth far less than the tax charged on that same interest.
It can push you up a band
Because the full rent counts as income, adding it to your salary can tip you into the higher rate band, or trigger the personal allowance taper over 100,000. The calculator stacks your rental profit on your other income to show the real effect.
Landlord tax FAQ
How much tax do landlords pay on rental income in the UK?
Rental profit is taxed at your marginal income tax rate: 20%, 40%, or 45% for 2026/27 in England, Wales and Northern Ireland, on top of your other income. Profit is rent minus allowable expenses, but not mortgage interest. Instead you receive a 20% tax credit on finance costs under Section 24. Use the calculator above to estimate the tax and your profit after tax.
What is Section 24?
Section 24 is the change, phased in between 2017 and 2020, that stopped private landlords deducting mortgage interest from rental income. Instead of a deduction you get a tax credit worth 20% of your finance costs. For basic rate taxpayers it roughly matches the old relief, but for higher and additional rate taxpayers it is worth far less than the tax now charged on that interest, which is why mortgaged landlords often pay more tax than they expect.
Can I still deduct my mortgage interest?
No. Since April 2020 mortgage and other finance costs cannot be deducted from rental income. You get a basic rate tax reducer worth 20% of the finance costs instead, limited to the lower of finance costs, property profit, or income above the personal allowance.
What expenses can a landlord claim?
Revenue costs wholly for the rental, such as letting agent fees, repairs and maintenance, landlord insurance, ground rent and service charges, accountancy, and safety certificates. Capital improvements and mortgage capital repayments are not allowable, and mortgage interest is handled through the Section 24 credit.
What is the property allowance?
A 1,000 pound tax free allowance on property income. If your gross rental income is 1,000 pounds or less you usually do not need to declare it. Above that you can deduct either your actual expenses or the 1,000 allowance, not both. This calculator uses actual expenses, so it does not apply the allowance.
Does this include Scotland?
No. The calculator uses the income tax bands for England, Wales and Northern Ireland. Scotland sets its own rates and bands, so Scottish taxpayers should use Scottish figures.
Should I hold property in a limited company?
Some higher rate landlords move to a company because companies still deduct mortgage interest and pay corporation tax rather than income tax. It is not automatically better once you account for extra running costs, mortgage rates, and tax on taking money out. Take advice before deciding. This tool models personal ownership only.
Is this calculator official?
No. It is a free estimate from Rentalize using published HMRC rates. HMRC is the official source. Confirm your figures with HMRC or an accountant before filing.
Keep your rental accounts tax ready
Rentalize records rent and expenses for every property and keeps digital records ready for Making Tax Digital, so landlords and letting agents go into tax season organised.
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