Rental income tax calculator 2026/27
Calculate the income tax you owe on rental profits, including the Section 24 mortgage interest restriction. Enter your figures to see your net rental profit and tax bill.
Calculate rental income tax
Total rent received before any deductions
Repairs, insurance, management fees, etc.
Annual mortgage interest (Section 24 applies)
Needed to calculate correct tax rate
Allowable expenses
- Letting agent and management fees
- Landlord insurance premiums
- Repairs and maintenance (not improvements)
- Ground rent and service charge
- Council tax and utility bills (if you pay them)
- Advertising and marketing costs
- Accountancy fees for rental accounts
- Travel to inspect the property
Capital improvements (e.g. extensions, new kitchens) are not allowable against income — but may reduce CGT when you sell.
Section 24: the key change
Before 2017, landlords could deduct 100% of mortgage interest from rental income. Section 24 phased this out — now you get a 20% tax credit instead. Higher-rate taxpayers who once got 40% relief now get just 20%, often doubling their effective tax on rental profits.
How rental income is taxed in 2026/27
Rental income is added to your other income and taxed at your marginal rate. You can deduct allowable expenses — such as agent fees, repairs and insurance — from your gross rent to calculate your net rental profit. This profit is what gets taxed.
Mortgage interest is treated differently. Under Section 24 (fully in force since April 2020), you can no longer deduct mortgage interest as an expense. Instead, you receive a 20% tax credit on the full interest amount. For basic-rate taxpayers, the outcome is similar. For higher-rate taxpayers, it significantly increases the tax bill.
Rental profits must be reported to HMRC via Self Assessment. If your gross rental income exceeds £2,500, you must register for Self Assessment even if your net profit is lower.