Rental income tax calculator
Rental profit is rent less allowable costs, taxed on top of your other income at your marginal rate. Mortgage interest is not deducted from it: you get a 20% basic-rate tax reducer instead, limited to the lowest of your finance costs, your property profit, or your income above the personal allowance. Rental profit carries no National Insurance.
Most rental calculators subtract the mortgage interest and give you a comforting number. This one does what the law does instead, and shows you the difference between the two.
Rental income tax calculator
Mortgage interest is not deducted from rental income — it is relieved as a basic-rate reduction, which is why the answer changes with your other income. Estimate only.
Why the answer depends on your salary
Rental profit is added to your other income and taxed at whatever rate that puts you in. The relief for mortgage interest does not move with you — it stays at 20%.
Take £12,000 of rent, £2,000 of costs and £6,000 of mortgage interest:
| Your other income | Tax on the rental profit | If interest were deductible |
|---|---|---|
| £25,000 (basic rate) | £800 | £800 — no difference |
| £60,000 (higher rate) | £2,800 | £1,600 — £1,200 more |
Same flat, same mortgage, same tenant. The higher-rate landlord pays £1,200 more than the old rules would have produced, and nothing about the property changed.
Worse, the full rent counts towards your total income before the relief is applied — so rental income can push you into higher rate, at which point the restriction starts biting on income that was basic rate a year earlier.
Get the real figure, and what to do about it
The calculator gives an estimate on one property and one set of assumptions. Send us the actual numbers — including anything you have not been claiming — and we will tell you what the year really produces.
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Free assessment first. If there is work to do, you get a fixed quote in writing before anything starts.
What this does not know
- Joint ownership — enter your share, with your own income.
- Multiple properties — profits and losses across a UK portfolio are pooled, which changes the answer.
- Losses brought forward from earlier years.
- Furnished holiday lets and rent-a-room, which have their own rules — see the rent a room scheme.
- Non-residence — if you live abroad, the non-resident landlord scheme applies first.
- Capital gains on sale, which is a separate calculation with a 60-day deadline.
For how the rules fit together rather than the arithmetic, see tax on rental income.
Questions people ask
Why does the calculator ask for my other income?
Because rental profit is taxed on top of it. The same £10,000 of rental profit costs a basic-rate taxpayer 20% and a higher-rate taxpayer 40% — and the mortgage relief stays at 20% either way, which is exactly where the pain comes from.
Why is mortgage interest entered separately?
Because it is not an expense for tax. It is relieved as a 20% tax reducer, not deducted from income. Enter it with the repairs and the answer will be wrong in your favour — which is the mistake most spreadsheets make.
Is National Insurance included?
No, and it should not be. Ordinary property letting is not a trade, so rental profit does not attract National Insurance. That is one of the few respects in which it is treated more kindly than self-employment.
What counts as an allowable cost?
Letting agent and management fees, repairs that restore rather than improve, landlord insurance, ground rent and service charges, safety certificates, accountancy fees, and travel to the property for genuine business reasons. Improvements do not — they reduce the capital gain when you sell instead.
Does it handle joint ownership?
Not directly. Enter your share of the rent and your share of the costs, with your own other income — the tax is worked out per person, not per property, so a couple in different tax bands get different answers on the same flat.
What about the property allowance?
If gross rental income is under £1,000 the property allowance may cover it entirely. Above that, you choose between the allowance and deducting actual costs — worth comparing where costs are low.
Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.
Reviewed 19 October 2026.
Part of our work on landlords and property — if you want someone to take it off your hands, start with our landlord accountant page.