How to use the landlord tax calculator
- 1 Enter the rent received in the tax year.
- 2 Enter your mortgage interest.
- 3 Enter other allowable expenses, such as letting fees, insurance and repairs.
- 4 Enter your other income and read the tax due.
Worked example
A landlord earning £45,000 with £18,000 of rent, £9,000 of mortgage interest and £2,500 of other costs. Rental profit before interest is £15,500, and tax on it is £5,146. The 20% credit on interest is £1,800, so tax due is £3,346, about £1,800 more than under the old rules.
Section 24, the property allowance and what is next
- Section 24: individual landlords cannot deduct mortgage interest from rent; they get a 20% tax credit instead, which hurts higher rate taxpayers most.
- Companies are not affected and deduct interest in full, but moving existing properties into a company can trigger CGT and stamp duty.
- Property allowance: the first £1,000 of rental income is tax-free if you do not claim expenses.
- From April 2027, rental profit in England, Wales and Northern Ireland is taxed at its own rates of 24%, 44% and 49%.
Check yield before tax with the Rental Yield Calculator, and the loan with the Buy-to-Let Mortgage Calculator. Tax is paid through Self Assessment; plan it with the Payments on Account Calculator.
Features
Section 24
Finance costs give a 20% basic rate tax credit.
Old vs new
Shows how much more tax you pay than before the change.
Cash after tax
What you keep after interest and tax.
When to use it
Higher rate landlords
See the effect of Section 24 at 40%. Check the yield with the Rental Yield Calculator.
Buying a buy-to-let
Check the numbers before you buy. See what you can borrow with the Buy-to-Let Mortgage Calculator.
Incorporation
Compare with owning through a company. Plan your tax with the Payments on Account Calculator.
Self Assessment
Estimate the bill before filing. Selling a rental? See the Capital Gains Tax Calculator.
Related Tax tasks
Frequently asked questions
What is Section 24?
A rule phased in from 2017 that stopped individual landlords deducting mortgage interest from rental income. Instead they get a 20% tax credit on finance costs.
Who is affected most?
Higher and additional rate taxpayers, who used to get relief at 40% or 45% but now only at 20%.
What expenses can I still deduct?
Letting agent fees, insurance, repairs, ground rent, service charges, accountancy fees and replacement of domestic items.
Does Section 24 apply to companies?
No. Limited companies can deduct mortgage interest as a business expense.
Can it push me into a higher band?
Yes. Because interest is not deducted, rental profit can push total income over £50,270.
Does it affect furnished holiday lets?
The special holiday let regime ended in April 2025, so these lets now follow the same rules.
What is the property allowance?
£1,000 of property income is tax-free, but you cannot use it together with actual expenses.
When do I pay?
Through Self Assessment by 31 January after the tax year, with payments on account.
Should I move my rentals into a company?
Companies pay Corporation Tax and can deduct interest, but transferring properties can trigger capital gains tax and stamp duty. Get advice before deciding.
Can unused finance cost credit be carried forward?
Yes. If the 20% credit is restricted because profits or income are too low, the unused amount can be carried forward to later years.
What about jointly owned property?
Each owner reports their share of rent, costs and interest, usually 50/50 for spouses unless a Form 17 declaration says otherwise.
Is Making Tax Digital relevant?
Landlords with qualifying income over £50,000 must use MTD for Income Tax from April 2026, with quarterly updates.
Is tax on rental income changing?
Yes. From 6 April 2027, property income in England, Wales and Northern Ireland is taxed at its own rates of 24%, 44% and 49%, announced in the Budget on 28 October 2026. This calculator uses the 2026/27 rules.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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