Do I pay tax on rental income? Landlord questions answered

No. You pay income tax on your rental profit, which is the rent you receive in the tax year from 6 April to 5 April, minus your allowable expenses. That profit is added to your wages, pension and any other income and taxed at your usual rates. The guide to tax on rental income works through each step with an example.

Your rental profit is taxed at the rates your total income reaches. In 2026/27 that means 20%, 40% or 45% in England, Wales and Northern Ireland, while Scottish rates apply if your main home is in Scotland. From 6 April 2027, property income in England and Northern Ireland has its own rates of 22%, 42% and 47%, explained in property income tax rates from April 2027.

Often, yes. If your gross property income is £1,000 or less in a tax year, the property allowance normally covers it and you do not need to tell HMRC. Your personal allowance of £12,570 can also cover rental profit if your other income has not used it up, although the allowance shrinks once your income passes £100,000. See when the property allowance beats claiming expenses for how the allowance works on larger rents.

Each owner pays tax on their own share of the profit, at their own rates. Married couples and civil partners who live together are usually taxed in equal shares, but if you own the property in unequal shares you can ask HMRC to tax the income to match by sending Form 17. Each owner can use the £1,000 property allowance against their share of the gross rent. The rental income tax calculator handles joint owners at any split.

National Insurance does not normally apply to income from letting property, so you pay income tax only on your rental profit. In some cases, such as when running a property business is your main job, you can choose to pay voluntary contributions.

Yes. Allowable running costs, such as letting agent fees, repairs and insurance, come off your rent before your profit is taxed. A repair that restores something to its original condition counts, but an improvement such as adding an extension is a capital cost and cannot be deducted from rent. The guide to allowable expenses for landlords lists what you can claim.

Yes, but not by being deducted from the rent. For residential lets you get a tax credit of 20% of your mortgage interest and other finance costs, rising to 22% from 6 April 2027. The credit is based on the lowest of your finance costs, your property profit and your income above the personal allowance, and any interest that misses out is carried forward. Section 24 mortgage interest relief explained sets out how the limits work.

Yes. Instead of claiming allowable expenses, you can take the £1,000 property allowance off your gross rent. You cannot claim both, and you cannot use the allowance if you claim the mortgage interest tax credit. Compare the two in property allowance or claiming expenses.

You make a rental loss, so there is no property profit to tax for that year. The loss is normally carried forward and set against future profits from the same rental business, and a loss on one let property is set against profits from your other lets automatically. Letting to friends or family at less than a commercial rent cannot create a loss to use against your other lettings. The rental income tax calculator lets you enter losses brought forward.

Not always. Under the Rent a Room Scheme, you can receive up to £7,500 a year tax free from letting furnished accommodation in your own home, or £3,750 if you share that income with someone else. How the Rent a Room Scheme works covers what happens if you receive more.

Usually, yes. If your gross property income is £1,000 or less you do not need to, and if it is between £1,000 and £2,500 a year you should contact HMRC. If it is £2,500 or more after expenses, or £10,000 or more before expenses, you report it on a Self Assessment tax return, and you must register by 5 October after the end of the tax year if you do not already send one. There is more on getting started in our page for first-time Self Assessment filers.

For a tax year ending on 5 April, a paper return is due by 31 October and an online return by 31 January, which is also the deadline for paying any tax you owe. Rental income goes on the UK property pages of the return, known as SA105. If you file late, the initial penalty is £100, with more if the return is later still. Find out about our Self Assessment tax return service.

Payments on account are advance payments towards your next tax bill, each worth half of the tax you owed for the previous year. They are due by 31 January and 31 July. You do not have to make them if your last Self Assessment bill was less than £1,000, or if you paid more than 80% of the tax you owed outside Self Assessment, for example through your tax code.

It will if your qualifying income, which is your rent plus any self-employment turnover before expenses, is over the threshold. That threshold was £50,000 from 6 April 2026, and it falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028. You then keep digital records, send quarterly updates from software and submit your tax return by 31 January, but your payment dates do not change. Read what Making Tax Digital means for landlords to check your dates.