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Rental income tax calculator

See the tax on your rent for this tax year or the two before it, with your mortgage interest credit worked out.

The short answer

Tax on rental income is worked out on your profit: the rent, less your allowable costs or the £1,000 property allowance. The profit is added to your other income and taxed at your normal rates. If you have a mortgage, you then take off a credit worth 20% of the interest, or less if your profit or your income is smaller than the interest.

How is tax on rental income worked out?

In five steps, which the calculator shows you one by one:

Find the profit. Take your running costs off the rent, or the £1,000 allowance if that leaves less tax.
Use up old losses. Any rental loss from earlier years comes off next.
Add your other income. Wages, pension and self-employed profit go on top.
Work out the Income Tax on the total, after your tax-free Personal Allowance.
Take off the mortgage interest credit, then compare with the tax you would pay without the rent.

What tax rates apply to rental income?

The same rates as your other income. Scotland has its own.

England, Wales and Northern Ireland, 2026 to 2027, 2025 to 2026 and 2024 to 2025:

Personal Allowance: £12,570, tax free. The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero.
20% on the first £37,700 above it, 40% up to £125,140, and 45% above that.

Scotland, on income above the Personal Allowance:

2026 to 2027: 19% up to £3,967, 20% up to £16,956, 21% up to £31,092, 42% up to £62,430, 45% up to £125,140, 48% above that.
2025 to 2026: 19% up to £2,827, 20% up to £14,921, 21% up to £31,092, 42% up to £62,430, 45% up to £125,140, 48% above that.
2024 to 2025: 19% up to £2,306, 20% up to £13,991, 21% up to £31,092, 42% up to £62,430, 45% up to £125,140, 48% above that.

From 2027 to 2028 rental profit has its own rates in England, Wales and Northern Ireland. The law as passed already sets them at 22%, 42% and 47% (law already), and the Budget on 28 October 2026 announced 24%, 44% and 49% in place of them, with a 24% mortgage interest credit (needs Parliament to pass Finance Bill 2026-27). The calculator adds that year once this is settled. What changes in 2027

How does the mortgage interest credit work?

You get 20% of your interest back off your tax bill, not as a cost. It is 20% of whichever of these is lowest:

your mortgage interest and fees, plus any carried forward from earlier years
your rental profit, after earlier losses
your income above the Personal Allowance

It is 20% in Scotland too. GOV.UK says The tax reduction can’t be used to create a tax refund. Interest the credit does not cover is carried forward: If the basic rate tax reduction is calculated using the ‘property business profits’ or ‘adjusted total income’ then the difference between that figure and ‘finance costs’ is carried forward to calculate the basic rate tax reduction in the following years. More on mortgage interest

Should I claim the £1,000 property allowance or my expenses?

Whichever leaves less tax. The calculator works out both and shows you the difference. You cannot have both: If you claim the property allowance you cannot claim a deduction for your expenses. And you cannot use the allowance if you claim the tax reducer for finance costs such as mortgage interest for a residential property.

The allowance cannot make a loss: You cannot deduct more than the amount of your income and create a loss. If you have mortgage interest carried forward from earlier years and it would still bring your tax down, you cannot use the allowance that year. And if you use it, that year’s interest is lost, not carried forward. HMRC’s manual: Where the choice is made to use the property income allowance, a carried-forward amount, as defined by S274A(6) cannot be created for that year to be used against the individual’s future years’ income tax liability.

We keep your rent and costs up to date every month, so the figures you put in here are the real ones.

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What does this calculator not include?

It stops without a figure for property owned through a company or a partnership, letting a room in your own home, property abroad or living abroad, a let to family below the normal rent, commercial property, Marriage Allowance, Married Couple’s Allowance or Blind Person’s Allowance, and a holiday let in 2024 to 2025. It also leaves out:

tax on savings interest and dividends, and any extra tax on them caused by the rent
pension contributions and Gift Aid, which can only lower the figure
the High Income Child Benefit Charge and student loan repayments
payments on account, and Capital Gains Tax when you sell

It gives you a calculation, not tax advice. Your Self Assessment return is the final figure.

What to do now

Add up the year’s rent from your bank statements or your agent’s statements.
Gather every running cost, and the interest figure from your lender’s yearly statement.
Put them in the calculator and compare the costs route with the £1,000 allowance.
Check whether you need to register for Self Assessment, and note the deadlines.

A few more questions

Do I put in the rent I receive or the rent before my letting agent's fees?

The full rent, before the agent takes anything. Put the agent's fees in your costs. If your agent pays you the rent less their fees, the full rent and each fee are on their statement.

Does the calculator work if I own the property with my partner?

Yes. Put in your share of the rent, the costs and the interest. Each owner gets their own £1,000 allowance against their share. GOV.UK says: "Property jointly owned by married couples and civil partners who live together will usually be taxed in equal shares." A different split needs you to really own the property, and the income, in unequal shares: "If you own the property in unequal shares and are entitled to the income in the same unequal shares, the income can be taxed on that basis. You both need to declare beneficial interests in joint property and income."

Why is my tax higher than my profit times my tax rate?

Usually for one of two reasons. The rent can push part of your income into a higher band, while the mortgage interest credit stays at 20%. Or your income is over £100,000, where the rent also shrinks your tax-free amount. GOV.UK says: "The Personal Allowance goes down by £1 for every £2 of income above the £100,000 limit. It can go down to zero." The calculator shows both when they happen.

Are holiday lets still taxed differently?

Not from the 2025 to 2026 tax year. The separate holiday let rules ended for Income Tax then, so a holiday let is taxed like any other let, and its mortgage interest gets the same 20% credit. The old rules still applied in 2024 to 2025, so the calculator does not cover a holiday let for that year.

Why can the calculator not work out 2027 to 2028 yet?

Because the rates for that year are not settled. The law already sets separate rates for rental profit from 2027 to 2028 of 22%, 42% and 47% (law already). The Budget on 28 October 2026 announced 24%, 44% and 49% to replace them, with a 24% mortgage interest credit (needs Parliament to pass Finance Bill 2026-27). We will add that year once this is settled and HMRC says how the new sum works.

Does the rental tax calculator store the amounts I enter?

No. The amounts you type stay in your browser. They are never sent to us or stored anywhere, and they are gone when you close the page. We only count things like which tax year is picked and what kind of answer comes back, never an amount.

Primary sources and further reading

Everything on this page is drawn from HMRC's own published guidance.

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