Last updated: 14 October 2026
Will £9,000 of room rental income be tax-free?
Not all of it. Rent-a-room relief makes up to £7,500 a year tax-free when you let furnished accommodation in your own home. If your gross income is £9,000, you have two choices: pay tax on the £1,500 above the limit, with no expenses deducted, or opt out of the scheme and pay tax on actual profit after expenses. The limit is halved to £3,750 each if the income is shared with someone else, such as a partner.
How the scheme works
| Gross receipts | What happens |
| Up to £7,500 | Exempt automatically; no need to report |
| Over £7,500 | Choose: tax on the excess, or normal profit |
| Shared income | £3,750 per person |
Gross receipts include rent and any amounts paid for meals, cleaning, laundry or utilities.
Example
Amira lets a room in her house to a lodger for £750 a month: £9,000 a year. Her extra costs are about £1,000 a year.
- Rent-a-room method: £9,000 minus £7,500 = £1,500 taxable. At 20%, that’s £300 tax.
- Normal method: £9,000 minus £1,000 expenses = £8,000 taxable, or £1,600 tax.
Rent-a-room is better for her.
Conditions
- The room must be furnished
- It must be in your main home, while you live there
- You can be an owner or a tenant (check your lease)
- It doesn’t apply to rooms let as offices or business premises
- It doesn’t apply if the home is converted into separate flats
Reporting on your tax return
If your income is over £7,500, you need to file a Self Assessment return. On the UK property pages, enter the gross rent and tick the rent-a-room box, then put the £7,500 as the relief. If you want to use normal profit, don’t claim the relief and enter your expenses instead. You can change your choice within one year of 31 January after the end of the tax year.
Rent-a-room vs property allowance
The £1,000 property allowance can’t be used with rent-a-room relief on the same income. Rent-a-room is usually better for lodgers.
Lodgers and other matters
- Tell your mortgage lender and insurer
- Lodgers don’t usually have tenancy rights; they’re licensees
- Council tax single-person discount may be lost
- CGT relief on your home isn’t affected by having a lodger
Keeping records
Even when your rent is under £7,500, keep a simple record of what your lodger pays each month and anything extra they pay for food or bills. If your income goes over the limit part way through a tax year, you will need these records to complete your return. You also need them if you choose to work out profit using actual expenses, because then you must show what each cost was.
Mid-year changes
If you start or stop taking a lodger part way through the year, the £7,500 limit is not reduced. But if your home stops being your main residence, relief stops from that date.
Frequently asked questions
Does it apply to Airbnb?
Yes, if you let a room in your own home and you live there.
What if I let two rooms?
The £7,500 limit is per home, not per room.
Do I need to register for Self Assessment?
Only if income is over £7,500 or you opt out.
Can my lodger pay for food?
Yes, but it counts as gross receipts.
Related: renting a room in your house, Airbnb landlords and HMRC and jointly owned rental income.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with rent-a-room and landlord tax. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
