UK Landlord Tax Calculator 2025/26
This UK Landlord Tax Calculator has been created to help landlords understand how their rental income may be taxed for the 2025/26 tax year, using current HMRC rules. It is designed as a planning and estimation tool, giving you a clearer picture of what your potential tax liability could look like before you complete your Self Assessment return.
When using the calculator, you should enter the total rental income you received during the tax year. This means the full amount of rent paid by tenants, before any expenses are deducted. It includes regular monthly rent, rent paid in advance, and any additional payments that are directly related to letting the property. Refundable deposits should not be included as income, as they do not belong to you unless retained for specific reasons at the end of a tenancy.
One of the most important parts of calculating rental tax is understanding allowable expenses. HMRC allows landlords to deduct costs that are incurred wholly and exclusively for the purpose of renting out the property. These expenses reduce your taxable rental profit and therefore lower the amount of tax you may need to pay.
Allowable expenses commonly include the cost of repairs and maintenance, such as fixing a boiler, repairing plumbing or electrics, repainting walls, replacing broken fixtures, or carrying out general maintenance to keep the property in a rentable condition. It is important to understand that repairs are allowable, but improvements are not. For example, replacing a like-for-like kitchen is usually acceptable, but upgrading a basic kitchen to a luxury specification would be considered an improvement and cannot be deducted from rental income.
Landlords can also deduct letting and management fees, including payments to letting agents for finding tenants or managing the property on an ongoing basis. Fees for tenant referencing, inventories, and check-in or check-out reports are usually allowable as well.
Insurance costs are another common allowable expense. This includes buildings insurance, landlord insurance, and contents insurance for furnished properties. These costs are considered part of protecting your rental business and can be included when calculating expenses.
​
If you, as the landlord, pay council tax or utility bills, these can also be deducted. This often applies during void periods or in cases where utilities are included in the rent. Allowable utilities may include gas, electricity, water, and even a TV licence if it is provided as part of the tenancy.
Professional fees are also deductible. This includes accountancy fees for preparing rental accounts or tax returns, as well as legal fees related to tenancy agreements. Costs for cleaning services, gardening, and general property maintenance can be claimed, provided they relate directly to the rental activity.
For furnished properties, HMRC allows a deduction for the replacement of domestic items, such as furniture, white goods, carpets, curtains, and household appliances. Only the cost of replacing an existing item can be claimed, not the original purchase of furnishing a property for the first time.
Instead of claiming actual expenses, some landlords may choose to use the £1,000 Property Income Allowance. This is a fixed deduction that can be applied instead of listing expenses individually. You can only use one method – either the allowance or actual expenses – and the calculator allows you to compare which option may be more beneficial.
Mortgage interest is treated differently under current rules due to Section 24. Mortgage interest is no longer deducted from rental profit. Instead, landlords receive a tax credit equal to 20% of the mortgage interest paid. This credit reduces the final tax bill rather than reducing taxable income. The calculator automatically applies this credit and shows its impact on the result.
Your other income, such as salary, pension, or self-employment income, plays a crucial role in determining how much tax you pay on rental profits. It affects how much of your Personal Allowance is available and which tax band your rental income falls into. The calculator takes this into account and automatically determines whether your income is taxed at the basic rate, higher rate, or additional rate.
The final result shown by the calculator is the estimated tax payable for the year, after personal allowance, tax bands, and the mortgage interest tax credit have been applied. This figure represents the income tax due on your rental activity for the tax year.
In addition, the calculator shows Payments on Account, which are advance payments towards your next tax bill. Payments on Account usually apply if your tax bill is over £1,000 and less than 80% of your tax is collected at source. They are split into two equal payments: the first is due by 31 January, and the second by 31 July. These payments may also include Class 4 National Insurance if you are self-employed.
It is important to remember that this calculator provides an estimate only. Tax situations can vary depending on individual circumstances, and HMRC rules can change. You should always keep accurate records of your rental income and expenses and consult HMRC guidance or a qualified accountant when completing your Self Assessment return.
Used correctly, this calculator can help you plan ahead, avoid surprises, and better understand how rental income tax works in the UK.