Rental Income Tax Calculator 2026/27

Calculate income tax on your rental income for 2026/27. Includes Section 24 mortgage interest restriction and all allowable landlord expenses.

Rental Income Tax Owed
£0
On rental profit of £0
Gross Rental Income
£0
Allowable Expenses
£0
Net Rental Profit
£0
Mortgage Interest Credit (20%)
£0
Tax Before Credit
£0
Final Tax Owed
£0
Enter your rental details to calculate your tax.
Income Breakdown
Section 24 · Mortgage Interest Restriction

Since April 2020, landlords can no longer deduct mortgage interest from rental income before calculating tax. Instead, you receive a 20% tax credit on your mortgage interest. This significantly increases the tax bill for higher-rate taxpayers.

Higher Rate Taxpayers: Under old rules you'd deduct mortgage interest at 40%. Under Section 24 you only get 20% relief · meaning you pay extra tax on the interest portion.

Landlords owning through a limited company can still deduct full mortgage interest, but pay corporation tax (25%) on profits and dividend tax on withdrawals.

Rental Tax FAQs

How much tax do I pay on rental income UK 2026?
Rental income is added to your other income and taxed at your marginal rate: 20% basic rate, 40% higher rate, or 45% additional rate. Under Section 24, mortgage interest is not deductible · instead a flat 20% tax credit applies. Allowable expenses such as agent fees, insurance, and repairs reduce your taxable profit before tax is calculated.
What is Section 24 mortgage interest restriction?
Since April 2020, landlords can no longer deduct mortgage interest from rental income before calculating tax. Instead, a 20% basic rate tax credit is applied. Higher-rate (40%) taxpayers are significantly worse off · they pay tax on gross rental income and only get 20% back, whereas before 2020 the full interest was deductible at their marginal rate.
What allowable expenses can I claim on a rental property UK?
Allowable expenses include letting agent fees, buildings and landlord insurance, repairs and maintenance (not capital improvements), accountancy and legal fees, and utility bills you pay as landlord. Mortgage interest is no longer deductible against income · only a 20% tax credit applies. Capital improvements such as extensions are not deductible against income but may reduce Capital Gains Tax on disposal.
Should I put my rental property in a limited company?
A limited company structure allows full mortgage interest deduction and pays corporation tax (25%) on profits rather than personal income tax. This can be advantageous for higher-rate taxpayers. However, limited company buy-to-let mortgages often carry higher rates, accountancy costs increase, and extracting profits as dividends incurs further personal tax. Professional advice is essential before transferring existing properties, as SDLT and Capital Gains Tax may apply.

For informational purposes only · Not financial advice · Tax rates shown are for 2026/27

Rental Income Tax · Section 24 Impact 2026/27

Section 24 means mortgage interest is NOT deducted from profit · instead you get a 20% tax credit. Higher-rate landlords pay significantly more tax than before.

Annual Rent Mortgage Interest Taxable Profit Basic Rate Tax Higher Rate Tax Higher Rate (after 20% credit)
£10,000£4,000£10,000£2,000£4,000£3,200
£15,000£6,000£15,000£3,000£6,000£4,800
£20,000£8,000£20,000£4,000£8,000£6,400
£12,000£3,000£12,000£2,400£4,800£4,200
Section 24 example: Under old rules (pre-2020), a higher-rate landlord with £15,000 rent and £6,000 mortgage interest would pay 40% on £9,000 = £3,600 tax. Under Section 24, they pay 40% on £15,000 = £6,000 minus 20% credit of £1,200 = £4,800 tax.