Landlord Tax Calculator
Calculate tax on UK rental income with Section 24 mortgage interest restriction. See your net tax, effective rate, and true rental take-home.
How UK landlord tax works in 2026/27
Rental income is added to your other income and taxed at your marginal rate (20%, 40%, or 45% in England). Since April 2020, Section 24 of the Finance Act prevents landlords from deducting mortgage interest as an expense. Instead, you receive a flat 20% tax credit on your mortgage interest payments.
This means higher-rate taxpayers pay 40% tax on rental profit but only receive 20% relief on mortgage interest — so their mortgage interest costs them twice the tax it did under the old system. For higher earners, that cut the profit on buy-to-let bought with a mortgage.
Allowable expenses include letting agent fees, insurance, maintenance and repairs, ground rent, service charges, and accountancy fees. Mortgage capital repayments, property improvements (as opposed to repairs), and your own time are not deductible.
Frequently asked questions
- What is Section 24?
- Section 24 of the Finance (No.2) Act 2015 changed how landlords get tax relief on mortgage interest. Before April 2017, mortgage interest was fully deductible from rental income. Now, it's replaced by a basic-rate (20%) tax credit, which means higher-rate taxpayers pay more tax than under the old system.
- How does Section 24 affect higher-rate taxpayers?
- Higher-rate taxpayers are most affected because they previously deducted mortgage interest at 40% (or 45%) but now only receive a 20% credit. For example, £10,000 of mortgage interest previously saved £4,000 in tax at 40%, but now only provides a £2,000 credit — doubling the effective tax cost.
- What expenses can landlords deduct from rental income?
- Allowable expenses include insurance premiums, letting agent fees, maintenance and repairs (not improvements), ground rent, service charges, legal fees for short leases or evictions, accountancy costs, and advertising for tenants. Mortgage capital repayments and property improvements are not deductible.
- Do I need to file a self-assessment tax return?
- Yes, if your rental income exceeds £1,000 per year (the property income allowance). You must register for self-assessment and file a return by 31 January following the end of the tax year. If your income is below £1,000, you can use the property allowance instead of deducting actual expenses.
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An estimate of the published rates as we understand them, not tax advice. Rates and reliefs change and depend on your circumstances — confirm with your solicitor or a qualified tax adviser before you rely on a figure.
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