Landlord tax calculator.
Estimate the tax on your rental profit, with mortgage interest relief given as a 20% tax credit.
Estimate your rental tax
Add your rent, costs and other income.
What is included
Rental profit is rental income less allowable expenses. If your rental income is £1,000 or less, the property allowance normally means no tax. Above that you can deduct the allowance instead of your actual expenses if it is better for you.
Mortgage interest is not deducted from profit. Instead you receive a tax credit worth 20% of the interest, limited to your rental profit.
About this calculator
What the landlord tax calculator does
This calculator estimates the income tax due on your rental profit, including the 20% tax credit for mortgage interest. It adds your rental profit to your other income, applies the 2026/27 bands and shows the extra tax caused by your property business.
Figures shown are for the 2026/27 tax year (6 April 2026 to 5 April 2027) for taxpayers in England, Wales and Northern Ireland. Scottish income tax bands differ.
Quick answer
With £30,000 of other income and £10,000 of rental profit before finance costs of £3,000, the extra tax is about £2,000 less a £600 mortgage interest credit, so roughly £1,400.
How rental income is taxed
Rental profit is your rent minus allowable costs such as letting agent fees, repairs, insurance and ground rent. Mortgage interest is not deducted as an expense for individual landlords. Instead you receive a basic rate tax credit equal to 20% of the interest. If your rent is below £1,000 for the year, the property allowance can mean you pay nothing. You can also choose the £1,000 property allowance instead of claiming actual expenses.
| Item | How it works |
|---|---|
| Property allowance | £1,000 of gross rent tax free, or use instead of expenses |
| Mortgage interest | Not deducted; 20% tax credit instead |
| Rental profit | Added to your other income and taxed at your marginal rate |
| Tax rates | 20% basic, 40% higher, 45% additional |
| Filing deadline | 31 January after the end of the tax year |
Worked examples for 2026/27
| Other income | Rental profit | Mortgage interest | Tax on rent | After 20% credit |
|---|---|---|---|---|
| £30,000 | £5,000 | None | £1,000 | £1,000 |
| £30,000 | £10,000 | £3,000 | £2,000 | £1,400 |
| £45,000 | £15,000 | £6,000 | £4,946 | £3,746 |
In the third example part of the rent falls into the higher rate band, which is why the tax is more than 20% of the profit.
How to use the calculator
- Enter your total rent for the year and your allowable expenses.
- Add mortgage interest and other finance costs separately.
- Enter your other income so the correct tax band is applied.
- Review the extra tax and set money aside for 31 January.
Common landlord mistakes
- Deducting mortgage interest as an expense, when only the 20% credit is available.
- Mixing up repairs, which are allowable, and improvements, which usually are not.
- Forgetting to report rent when income is above the £1,000 allowance.
- Missing the 60 day deadline to report and pay Capital Gains Tax when you sell a property.
Assumptions and limits
The calculator uses 2026/27 rates for England, Wales and Northern Ireland, treats rental profit as one pool and does not model jointly owned property splits, Rent a Room relief or furnished holiday lets. Use it as an estimate and have your return prepared by our accountants for an exact figure.
Frequently asked questions
Do I pay tax on rental income under £1,000?
No. The property allowance means gross rent of £1,000 or less is tax free and does not need to be reported in most cases.
Can I deduct mortgage interest?
Not directly. Individual landlords receive a tax credit of 20% of the interest instead.
When do I pay tax on rental income?
Through Self Assessment. The return and balancing payment are due on 31 January after the tax year ends, with payments on account if your bill is above £1,000.
Authorised and regulated
Is Cheap Tax Returns authorised and regulated? Yes.
Your return is prepared by qualified UK accountants holding qualifications from the leading accountancy bodies: ICAEW, ACCA and AAT. We are also on the ICAEW approved employers list, so you can file with confidence.
Regulated by the professional bodies. Reviewed by qualified accountants. Part of Accotax.
Questions, answered.
Letting agent fees, repairs and maintenance, insurance, ground rent and service charges, and similar running costs. Improvements are not allowable.
Usually yes if your rental income is above the property allowance. See our landlord tax return service.
Next steps
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Know your price before we start.
- Fixed fee confirmed in writing before any work begins
- ICAEW, ACCA and AAT-qualified accountants
- Filed with HMRC and confirmed, so you have proof
- A real person on the phone: 0203 4411 258