Last updated: 18 October 2026
Landlord tax in the UK: key rules for 2026/27
If you let out property in the UK, you pay Income Tax on your rental profit: the rent you receive minus allowable expenses. Here are the rules every landlord needs to know this tax year (6 April 2026 to 5 April 2027).
How rental profit is taxed
Rental profit is added to your other income and taxed at your usual rates: 20% basic rate up to £50,270, 40% higher rate and 45% above £125,140, after the £12,570 Personal Allowance. From 6 April 2027 property income will have its own rates of 22%, 42% and 47%, so planning now matters.
The £1,000 property allowance
If your gross rental income is £1,000 or less in a tax year, you don't need to report it. Above that, you can deduct either the £1,000 allowance or your actual expenses, whichever is higher.
Allowable expenses
- letting agent and management fees;
- repairs and maintenance (not improvements);
- insurance, ground rent and service charges;
- council tax and utilities you pay for the tenant;
- accountancy fees and replacing furnishings (replacement of domestic items relief).
Our guide on what expenses landlords can claim covers this in more depth.
Mortgage interest (Section 24)
Individual landlords can't deduct mortgage interest from rental income. Instead you get a tax credit worth 20% of your finance costs. Higher-rate landlords often pay more tax as a result, which is why some move properties into a limited company. Talk to us before you do, because transferring property can trigger Capital Gains Tax and Stamp Duty Land Tax.
Deadlines and Making Tax Digital
Report rental income on the SA105 pages of your Self Assessment return. The 2025/26 return and payment are due online by 31 January 2027. Making Tax Digital for Income Tax now applies to landlords and sole traders with combined qualifying income over £50,000 (from 6 April 2026). It extends to income over £30,000 from April 2027 and over £20,000 from April 2028. If you are affected, you must keep digital records and send quarterly updates.
Selling a rental property
Capital Gains Tax on residential property is 18% or 24% for 2026/27, after the £3,000 annual exempt amount. UK residents must report and pay the tax within 60 days of completion.
Landlord tax FAQs
Do I need to file a tax return as a landlord?
Yes, if your rental income is over £1,000 or you have a profit to report. Read do I have to do a tax return as a landlord?
Can I offset a rental loss?
Rental losses are carried forward against future profits from the same property business. They can't usually be set against your salary.
I live abroad. Does this apply to me?
Yes, with extra rules. See our non-resident landlord tax guide.
Let us handle your landlord tax return. Our landlord accountants prepare your return, claim every allowable expense and get you ready for Making Tax Digital, for a fixed fee. See our landlord packages or call 0800 644 1258.