Rental Income Tax Calculator 2025/26

Reviewed by Mustafa Bilgic
UK Calculator Editor · Updated May 2026

How rental income is taxed in 2025/26

UK rental income tax is computed in four steps: (1) calculate rental profit by deducting allowable expenses but not mortgage interest from gross rents; (2) add the profit to your other taxable income to find the marginal rate; (3) compute income tax on the rental profit at the marginal rate; (4) deduct the 20% Section 24 credit on mortgage interest.

Joint owners split rents and expenses according to their ownership shares. Married couples and civil partners default to 50/50 unless they file Form 17 declaring different beneficial shares — the form must accompany evidence (declaration of trust) and only takes effect from the date filed.

Allowable rental expenses in 2025/26

Common allowable expenses: letting agent fees, gas safety certificates, electrical inspections (EICR), repairs and maintenance (not improvements), insurance, ground rent, service charge, council tax during void periods, water rates if landlord-paid, accountancy fees for the rental return, legal fees on lets up to 50 years, advertising, mileage to inspect (HMRC rates), and replacement of domestic items relief for furnished lets.

Not allowable: capital improvements (extension, kitchen upgrade), the capital element of mortgage payments, personal use proportion (e.g. half a holiday home), and entertainment.

Sole basic-rate landlord

Rent £15,000, expenses £3,000, interest £4,000, PAYE £40,000. Profit £12,000. Tax £2,400, Credit £800. Net £1,600.

Joint owners 50/50, basic + higher rate

Rent £24,000, expenses £6,000, interest £7,000. Profit £18,000 each takes £9,000. Spouse A on £25,000 PAYE: profit at 20% = £1,800; credit £700. Net £1,100. Spouse B on £80,000 PAYE: profit at 40% = £3,600; credit £700. Net £2,900.

Form 17 unequal split for tax efficiency

Same property, declared 80/20 in spouse A's favour. Spouse A profit £14,400 at 20% = £2,880; credit £1,120. Net £1,760. Spouse B profit £3,600 at 40% = £1,440; credit £280. Net £1,160. Combined £2,920 vs £4,000 above — saving £1,080.

Common mistakes to avoid

• Splitting rent 50/50 between unmarried joint owners regardless of true ownership.
• Filing Form 17 without the underlying declaration of trust.
• Treating routine decoration as capital improvement (it's allowable revenue).
• Claiming for a full new bathroom suite vs replacing the existing — only the like-for-like is allowable.
• Missing the wear & tear-style replacement of domestic items relief on furnished lets.

When to use this calculator

Use throughout the tax year to forecast January's bill, and at year-end before filing. Couples should run twice (once per partner) to model a Form 17 declaration.

How this differs in Scotland, Wales and Northern Ireland

Scottish, Welsh and NI landlords use the same allowable-expenses rules. Income tax rates differ in Scotland — Scottish landlords face a sharper Section 24 squeeze because the 20% credit is fixed UK-wide while higher-rate Scots pay 42–48%.

When this calculator is and isn't the right tool

The Rental Income Tax Calculator 2025/26 above is built for the most common UK 2025/26 scenarios in this tax area. It will be the right tool when your situation maps cleanly onto the inputs — single property or simple aggregation, standard HMRC rates and bands, and individual taxpayer (rather than complex trust or partnership structures). It is informational and does not replace tailored advice from a chartered tax adviser, especially for transactions above £500,000, cross-border situations, or where reliefs interact with each other. For year-end filings, always reconcile with HMRC's own free calculators on gov.uk before pressing submit on Self Assessment.

Closely related calculators

• Landlord Tax Calculator — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Property Income Tax 2025/26 — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Section 24 Calculator — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• £1,000 Property Allowance — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• UK Property Income Tax 2026 — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.

Glossary of UK property tax terms

Section 24

The 2017 rule replacing full mortgage interest deduction with a 20% tax credit for individual residential landlords.

SA105

The Self Assessment supplementary form for UK property income.

Box 44

The SA105 box for residential property finance costs (mortgage interest).

Property allowance

£1,000 tax-free band for individual property income, claimable instead of expenses.

Rent-a-Room scheme

Separate £7,500 allowance for letting a furnished room in your main home.

Tax planning checklist

1. Confirm the figures input above match your actual position — purchase contract, mortgage offer or completion statement.
2. Cross-check the year (2025/26) — figures change every April. The tax year 2026/27 starts 6 April 2026.
3. Use HMRC's official calculator at gov.uk for the final filing figure; this calculator is informational.
4. Keep records for at least 6 years — HMRC's normal enquiry window. 21 years for fraud investigations.
5. Discuss any unusual transaction (joint purchase, gift, divorce settlement, trust) with a qualified tax adviser.
6. Submit your return online via Government Gateway — paper deadlines are earlier and penalties harsher.