Rental Income Tax Calculator UK
Rental income in the UK is subject to Income Tax at your marginal rate, but the rules changed significantly after April 2020 with Section 24. This calculator works out exactly how much tax you owe on your rental income, accounting for allowable expenses, the mortgage interest restriction, and your other income sources. Use it each tax year to estimate your Self Assessment liability before it arrives.
Why this matters
Landlords who don't calculate their tax liability in advance often face surprise bills — and sometimes penalties. Knowing your number early lets you set aside funds and plan.
Key points
- UK rental income is taxed at 20%, 40%, or 45% depending on your total taxable income
- Since Section 24, mortgage interest is no longer fully deductible — you receive a 20% tax credit instead
- Allowable expenses include letting agent fees, repairs, insurance, and professional fees
- Your personal allowance (£12,570 in 2024/25) applies across all your income sources
- If rental income pushes you into the higher rate band, more of your income is taxed at 40%
- You must report rental income via Self Assessment if it exceeds £1,000 per year
Frequently asked questions
Do I pay income tax on gross rent or profit?
You pay tax on your rental profit — gross rent minus allowable expenses. Mortgage capital repayments are not deductible, but other costs like insurance, maintenance, and letting agent fees are.
What is the Section 24 mortgage interest restriction?
Since April 2020, landlords can no longer deduct mortgage interest from rental income. Instead, you get a tax credit worth 20% of your mortgage interest against your final tax bill.
Can I use my personal allowance against rental income?
Yes — your personal allowance (£12,570 in 2024/25) applies to your total income, including rental income. If you have employment income, it usually uses up your allowance first.
When do I have to pay this tax?
Rental income tax is declared via Self Assessment. The payment deadline is 31 January following the end of the tax year.
What if I make a loss on my rental property?
Rental losses can be carried forward and offset against future rental profits — but they cannot be set against other income sources.