Rental Income Tax Calculator 2026/27

Rental Income Tax Calculator 2026/27

Net rental income

£10,200

£15,000 profit − £4,800 tax · effective 26.7% on gross rent

2026/27 rates · Last checked · Sources in page details

Where the rent goes

Tax £4,800

£18,000 gross rent

Net to you

£10,200

Expenses

£3,000

Mortgage interest

£6,000

Tax (after credit)

£4,800

Section 24 effect

Tax on rental profit

£6,000

20% mortgage interest credit

− £1,200

Net tax on rental

£4,800

Roughly £1,200more than you'd have paid before April 2017, when interest was fully deductible.

Quick facts

  • • £1,000 property allowance covers small lets, declared only if you use actual expenses instead.
  • • Rental profit counts as non-savings income and stacks on top of salary.
  • • Property held in a limited company keeps full interest deduction, which is why some landlords incorporate.
  • • Rent a room relief is separate: £7,500 tax free for furnished room in main residence.

Where your tax goes

on £4,800 rental income tax

This is an estimate. The government does not set aside your exact tax for these areas.

21%

£1,022

Welfare

≈ 15 weeks of welfare per citizen

21%

£1,003

Health

≈ 102 days of NHS care (per citizen)

12%

£571

State Pensions

≈ 2 weeks of state pension

11%

£518

National Debt Interest

10%

£494

Education

≈ 13 school days funded

6%

£264

Defence

See the full UK budget →

+ £931 across public order & safety, transport, business & industry and 6 more

Estimates onlyShow

Calculations use HMRC published rates for education and illustration. They are not regulated financial, tax, or legal advice. Verify against your own tax position before filing or making financial decisions.

Background reading

UK rental income tax in 2026/27

Show

Since 2020, mortgage interest can no longer be deducted from rental income. Instead it gives a flat 20% tax credit, which is why higher-rate landlords saw their effective tax rates jump after the rule fully phased in. Rental profit is added to your other income and taxed at your marginal band, so the same rental can produce very different post-tax outcomes depending on your salary.

  • Can I deduct mortgage interest from rental income?

    No, not since 2020. Section 24 replaced full deduction with a 20% basic-rate tax credit. So if your mortgage interest is £8,000, you no longer subtract that from profit, you get a £1,600 tax reduction instead. Higher-rate landlords pay materially more tax than they did pre-2017.

  • What is the £1,000 property allowance?

    If your gross rental income is under £1,000 you don't need to declare it. Above £1,000 you can choose either the £1,000 allowance (no expenses) or actual expenses, whichever gives more relief. Most landlords with mortgages or repairs are better off claiming actual expenses.

  • Is buy-to-let still worthwhile after Section 24?

    It depends on your tax band and gearing. Lightly geared higher-rate landlords are still profitable; heavily geared ones can be worse off than before 2017. Many landlords have moved properties into limited companies to retain interest deduction at the corporate level.

  • When is rent-a-room relief?

    Separate scheme: up to £7,500 of income from letting a furnished room in your main home is tax free. Above £7,500 you choose between the relief flat rate or normal expenses. The Afterax rental calculator covers buy to let, not rent a room.

Privacy, sources & last reviewed14 May 2026 · Show

Privacy and independence

Built and maintained by Afterax as an independent educational UK tax calculator project. Calculations run in your browser using HMRC 2026/27 rates. Inputs can be saved on this device and included in share links.

Sources

Bands, thresholds and reliefs come from official sources and are checked when a Budget or in-year change is announced.

Last reviewed 14 May 2026 · updated for 2026/27 · view changelog →