Property tax, without the guesswork.

How rental income is taxed

If you let out property in the UK, your rental profit is added to your other income and taxed at your usual rates. Rental profit is the rent you receive minus allowable costs. You report it on the property pages of your self assessment return.

If your gross property income is small, the £1,000 property allowance may mean you don't need to report it, or you can deduct the allowance instead of actual costs. Most landlords with a full let are better off claiming actual costs.

Costs you can claim

You can deduct costs incurred wholly for the letting business: letting agent and management fees, repairs and maintenance, insurance, ground rent and service charges, utility bills you pay, accountancy fees, and the cost of replacing furnishings in a furnished let.

What you can't deduct against rental income is capital spending — buying the property, extensions or improvements. Those may reduce capital gains tax when you sell, so we keep a record of them for later.

Mortgage interest relief

For most individual landlords with residential property, mortgage interest isn't deducted as an expense. Instead you get a tax credit at the basic rate on your finance costs. The effect is biggest for higher-rate taxpayers, and it can push some landlords into a higher band. We'll show you exactly how it affects your bill.

Jointly owned property

Married couples and civil partners who own property together are normally taxed 50/50, whatever their actual shares. If the ownership is unequal, you may be able to be taxed on your real shares by making a declaration to HMRC — useful where one partner pays a lower rate of tax.

Making Tax Digital for landlords

Gross rental income counts towards the Making Tax Digital for Income Tax threshold. If you're over it — on its own or together with self-employment income — you'll need to keep digital records and send quarterly updates. We'll set up software that handles multiple properties and file each update for you.