Free Landlord Tax Calculator
Estimate your UK rental property tax liability instantly. Understand how Section 24, allowable expenses, and your tax band impact your final bill.
Calculate Your Rental Tax Bill
Enter your annual rental figures below. The calculator applies current UK tax rules, including the 20% basic rate mortgage interest tax reduction.
Rental Profit Estimator
Enter your annual figures to estimate your tax liability
Tax Efficiency Tips
Maximise your rental returns legally
Understanding Section 24 Tax
The way individual landlords are taxed on mortgage interest changed significantly. Here is how your tax is calculated today.
Calculate Taxable Profit
Your taxable profit is your total rental income minus your allowable running expenses. Under current rules, mortgage interest is not deducted at this stage.
Apply Your Income Tax Rate
This taxable profit is added to your other income (e.g., salary) to determine your tax band. You pay 20%, 40%, or 45% tax on this rental profit, depending on your total income.
Deduct the Tax Reduction
Finally, you receive a tax reduction (not a deduction from profit) equal to 20% of your annual mortgage interest payments. This is subtracted from your final tax bill.
Declare via Self Assessment
You must declare this income and pay the calculated tax via the HMRC Self Assessment tax return by the 31st of January following the end of the tax year.
Allowable vs Non-Allowable Expenses
A general summary of what you can and cannot deduct from your rental income for tax purposes.
| Expense Type | Tax Deductible? | Examples |
|---|---|---|
| Property Maintenance & Repairs | Yes | Fixing a leaky roof, repainting walls, repairing a broken window. |
| Finance Costs | Partial (20% relief) | Mortgage interest, loan fees for buying furniture, credit card fees. |
| Utility Bills & Council Tax | Yes (if paid by landlord) | Gas, electricity, water, and council tax during void periods or included in rent. |
| Professional Fees | Yes | Letting agent fees, accountant fees, legal fees for renewing a lease (not buying). |
| Capital Improvements | No | Building an extension, replacing a standard kitchen with a luxury bespoke one. |
| Personal Expenses | No | Travel costs for routine inspections, personal phone bills, clothing. |
Landlord Tax FAQ
Answers to the most frequently asked questions about UK rental property taxation.
Section 24 of the Finance (No. 2) Act 2015 restricts tax relief on finance costs for individual landlords. Instead of deducting mortgage interest from rental income before calculating tax, landlords now receive a tax credit equal to 20% of their mortgage interest payments.
Allowable expenses include letting agent fees, maintenance and repairs (not improvements), buildings and contents insurance, council tax (if paid by you), utility bills (if included in the tenancy), and professional fees like accountant or legal costs.
Yes. You pay tax on your rental profit (income minus allowable expenses). Your mortgage capital repayments are not tax-deductible, and under Section 24, mortgage interest is no longer deducted from your profit but instead provides a 20% basic rate tax reduction.
For higher and additional rate taxpayers, owning through a limited company is often more tax-efficient, as companies can still deduct 100% of mortgage interest as a business expense before calculating Corporation Tax, unlike individual landlords.