How is rental income taxed?

Rental income is added to your other income and taxed at your marginal rate (20%, 40% or 45%). You can deduct allowable expenses including letting agent fees, insurance, repairs and maintenance. Mortgage interest relief is given as a 20% tax credit rather than a deduction.

What expenses can landlords claim?

Allowable expenses include letting agent and management fees, insurance premiums, maintenance and repairs (not improvements), ground rent and service charges, accountancy fees, legal fees for renewing tenancies, and travel costs for property management. Mortgage interest gets a 20% tax credit.

Landlord Tax Calculator (Section 24)

Calculate tax on rental income including Section 24 mortgage interest relief for buy-to-let landlords.

Last updated: April 2026 · Source: GOV.UK — Tax relief for residential landlords

Annual Rental Income

Mortgage Interest (annual)

Allowable Expenses

Other Income (salary etc.)

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Landlord income tax is calculated on your net rental profit — total rental income minus allowable expenses. Allowable expenses include letting agent fees, maintenance and repairs, insurance, accountancy fees, advertising costs and travel to the property. Since April 2020, mortgage interest cannot be deducted as an expense; instead, a 20% tax credit is given on finance costs.

Your rental profit is added to any other income to determine your tax band. Basic-rate taxpayers pay 20% on rental profits, higher-rate pay 40% and additional-rate pay 45%. The 20% mortgage interest tax credit is the same regardless of your band, meaning higher-rate taxpayers pay more effective tax on rental income with mortgage interest than under the old rules.

This calculator works out your landlord tax liability for the 2025/26 tax year. Enter your rental income, expenses, mortgage interest and other income to see the tax due, the effect of the finance cost restriction and your effective tax rate on rental profits.

Example: £18,000 rental income, £4,000 expenses, £7,200 mortgage interest, 40% taxpayer

Net rental profit: £18,000 − £4,000 = £14,000
Tax at 40%: £14,000 × 40% = £5,600
Finance cost credit: £7,200 × 20% = −£1,440
Net tax on rental income: £5,600 − £1,440 = £4,160
Effective rate on total rental income: 23.1%

Source: GOV.UK — Tax relief for residential landlords

Frequently Asked Questions

How is rental income taxed?: Rental income is added to your other income and taxed at your marginal rate (20%, 40% or 45%). You can deduct allowable expenses including letting agent fees, insurance, repairs and maintenance. Mortgage interest relief is given as a 20% tax credit rather than a deduction.
What expenses can landlords claim?: Allowable expenses include letting agent and management fees, insurance premiums, maintenance and repairs (not improvements), ground rent and service charges, accountancy fees, legal fees for renewing tenancies, and travel costs for property management. Mortgage interest gets a 20% tax credit.