Landlord guide
Landlord Tax UK 2026: Income Tax, Allowable Expenses & Self Assessment
Reviewed by a qualified UK housing solicitor • Updated: May 2026
Sources: GOV.UK, Shelter England, NRLA, Citizens Advice
Reading time: ~10 min
Rental income is taxable in the UK. Most landlords pay through Self Assessment, deducting allowable expenses to calculate profit. Section 24 has replaced full mortgage interest deduction with a 20% basic-rate tax credit since 2020. This page is informational only — for tax planning, consult an accountant.
Do I Need to Declare Rental Income?
Yes if rental income exceeds £1,000 a year (the property income allowance). Register for Self Assessment by 5 October following the tax year in which you started letting.
How Rental Profit Is Calculated
Profit = total rental income minus allowable expenses. The mortgage interest is not an allowable expense for residential lets — instead a 20% basic-rate tax credit applies (Section 24).
Allowable Expenses — Full List
Agent and letting fees, repairs (not improvements), buildings and contents insurance, service charges and ground rent, advertising, legal and accountancy fees, replacement of domestic items, utility bills paid by the landlord, council tax during void periods.
Section 24 Mortgage Interest Relief
Mortgage interest is no longer deducted from rental income. Instead landlords receive a tax credit equal to 20% of the mortgage interest. This pushes some higher-rate taxpayers into a tax-paying position even where there is little or no cash profit.
Key HMRC Deadlines
Paper return: 31 October. Online return and balancing payment: 31 January. Payments on account: 31 January and 31 July.
Making Tax Digital for Landlords
MTD for Income Tax Self Assessment (MTD ITSA) applies to landlords with gross income above £50,000 from April 2026 and above £30,000 from April 2027. Quarterly digital updates required.
Frequently asked questions
Do I pay tax on a lodger's rent?+
If you rent out a furnished room in your own home you can earn up to £7,500 a year tax-free under the Rent a Room Scheme.
What is the property income allowance?+
The first £1,000 of rental income is tax-free. Above that you must register for Self Assessment.
Can I deduct a new kitchen as an expense?+
A 'like-for-like' replacement is a repair (deductible). A significant upgrade is a capital improvement (deductible only against future capital gains).
What if I make a loss on my rental property?+
Losses are carried forward and offset against future rental profits — not against other income.
When do I register for Self Assessment?+
By 5 October following the tax year in which rental income first exceeded £1,000.