Do landlords need to file?
| Gross rental income in the tax year | What to do |
|---|---|
| £1,000 or less | Covered by the property allowance — usually nothing to do |
| £1,000 to £2,500 | Contact HMRC — it may be collected through your tax code |
| Over £2,500 (or £10,000+ before expenses) | Register for Self Assessment and file a return |
Renting a furnished room in your own home? The separate Rent a Room scheme lets you earn up to £7,500 a year tax-free.
How rental profit is taxed
Your rental profit — rent received minus allowable costs — is added to your other income for the year and taxed at your usual rates. That can push you into a higher band, so it's worth estimating early with the tax calculator.
Useful tool
Add your rental profit to your other income and see the estimated bill.
Costs you can deduct
- Letting agent and management fees.
- Repairs and maintenance (not improvements).
- Insurance (buildings, contents, landlord policies).
- Ground rent, service charges and council tax/bills you pay.
- Accountancy and legal fees for renewing leases (not buying the property).
- Replacing domestic items such as furniture and appliances (like-for-like).
- Travel to and from the property for letting business.
Our blog post on expenses landlords forget to claim goes into more detail.
Mortgage interest: Section 24
For residential property held personally, you can't deduct mortgage interest from your rental income. Instead, you get a tax credit equal to 20% of your finance costs (mortgage interest and some fees).
| Basic-rate landlord | Higher-rate landlord | |
|---|---|---|
| Rent minus other costs | £10,000 | £10,000 |
| Mortgage interest | £4,000 | £4,000 |
| Tax on £10,000 | £2,000 (20%) | £4,000 (40%) |
| Less 20% credit on £4,000 | −£800 | −£800 |
| Tax due | £1,200 | £3,200 |
That's why higher-rate landlords pay more than they did before Section 24. Simplified example only — the credit is capped in some situations.
Property allowance vs actual costs
If your costs are low, you can deduct the £1,000 property allowance instead of your actual expenses. You can't do both, and you can't use it alongside Rent a Room relief on the same income.
Furnished holiday lettings
The special furnished holiday lettings (FHL) tax regime was abolished from 6 April 2025. Holiday lets are now taxed like other property income, including the Section 24 rules.
Reporting it
UK rental income goes on the SA105 property pages of your return. Have your letting agent's annual statement, mortgage interest statement and receipts ready. Landlords with property and self-employment income over the thresholds will also need Making Tax Digital from April 2026.
With TaxGo, upload your letting statement and mortgage statement and we'll build your property section, apply the 20% finance cost credit and show every figure's source. More on our landlords page.
Jointly owned property
If you own a rental property with someone else, each owner reports their share of the profit on their own tax return. Married couples and civil partners who own property jointly are usually taxed 50:50 by default, even if the actual ownership split is different.
If you own the property in unequal shares and want to be taxed on your actual shares, you can make a joint declaration to HMRC using Form 17, backed up by evidence of the beneficial ownership split. This can save tax where one partner pays a lower rate.
For unmarried co-owners, profits are normally split according to your ownership shares, or another split you've agreed.
Records to keep
Keep your tenancy agreements, the letting agent's annual statement, mortgage interest statements, invoices for repairs and any insurance documents for at least five years after the 31 January filing deadline.