Calculate landlord tax

Estimate 2026/27 Income Tax on residential rental profit for an individual in England or Northern Ireland.

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ToolLandlord Tax Calculator
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How it works

Allowable non-finance expenses reduce rent to property profit, which is taxed as the top slice above other income after the tapered Personal Allowance. Mortgage interest is excluded from expenses and instead receives a 20% reduction capped by finance costs, property profit, and adjusted total income; the reduction cannot create a refund.

Formula
finance-cost reduction = 20% × lowest eligible cap
  • The £12,570 allowance tapers by £1 for each £2 above £100,000 and reaches zero at £125,140.
  • Rates are fixed to 2026/27 and exclude Scotland and companies.

Worked example

A landlord with 30,000 of other income
15,000 rental income, 3,000 of allowable expenses and 6,000 of mortgage interest
Input
											Annual rental income: 15000
Allowable expenses: 3000
Mortgage interest: 6000
Other annual income: 30000
Output
												Property profit: 12000
Personal allowance used: 12570
Marginal tax band percent: 20
Tax on property profit before credit: 2400
Finance cost tax credit: 1200
Tax on property profit after credit: 1200
Effective tax rate on profit percent: 10

When to use this

Buy-to-let Self Assessment, higher-rate finance-cost reviews, and rental bookkeeping separate deductible repairs and agent fees from restricted mortgage interest.

Edge cases

  • A property loss produces no current property tax or finance-cost reduction and does not reduce tax on unrelated income in this estimate.
  • Finance costs above property profit are capped to that profit before the 20% reduction.
  • Companies, Scotland, carried-forward property losses, unused finance costs, savings, dividends, and jointly owned property are outside this estimate.

References