Personal Landlords. Simplified.
How rental income is taxed in the UK
If you let out a property in the UK, you pay Income Tax on your rental profit, not on the rent itself. This page explains how rental income tax works for landlords, which expenses you can claim and what changes if you live abroad. It is written by a Chartered Tax Adviser and checked against HMRC guidance on 18 October 2026.
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Tax on property profits
You pay tax on profit, not on rent: Your rental profit is the rent you receive, plus any charges to tenants for services such as cleaning or heating, minus the expenses you can claim. If you let more than one property, the profits and losses are added into one figure for your property business. Joint owners are taxed on their own share. Married couples and civil partners living together are usually taxed on equal shares unless they own the property, and are entitled to the income, in unequal shares and have told HMRC.
Allowable property expenses
Landlord expenses you can claim: costs wholly and exclusively for letting the property. Repairs and maintenance, such as fixing a broken boiler or redecorating between tenants. Letting agent and management fees. Landlord insurance. Water rates, council tax, gas and electricity you pay yourself. Ground rent and service charges. Accountant's fees. Replacing furniture and appliances in a furnished let, up to the cost of an equivalent item. Improvements, such as an extension or a better kitchen, are capital costs and cannot be deducted from rental income. Keep the records, because they may reduce a capital gains tax bill when you sell.
The £1,000 property allowance: You can choose a £1,000 property allowance instead of claiming expenses. If you claim it you cannot also deduct expenses. Letting a furnished room in your own home has its own scheme, tax-free up to £7,500 a year (£3,750 if you share the income).
What every landlord needs to know
Three rules that catch landlords out:
Mortgage Interest
You cannot deduct mortgage interest on a residential let from rental income. Relief on finance costs is restricted to the basic rate of Income Tax, so some landlords pay more tax than their profit suggests. Holding property in a company is taxed differently and is a decision to take advice on first.
Reporting rental income
Rental profit goes on your Self Assessment return. If you have not filed before, tell HMRC by 5 October after the end of the tax year in which you first had taxable profit. Keep records for at least five years after the 31 January filing deadline. Rental income is also moving to quarterly digital reporting. Our Making Tax Digital for landlords page explains what applies to you.
The non resident landlord scheme
If you let UK property while your usual place of abode is outside the UK, the scheme applies. HMRC normally treats an absence of six months or more as living abroad for this purpose. Your letting agent, or your tenant if you have no agent, must deduct tax from your rent each quarter and pay it to HMRC. You can apply to HMRC to receive rent with no tax deducted. HMRC approves you if your UK tax affairs are up to date, you have never had UK tax obligations, or you do not expect to owe UK tax that year. Approval does not remove the tax: you still report the income and pay what you owe through Self Assessment.
As an online practice, we work with landlords wherever they live.
GET YOUR OWN FIGURES CHECKED:
Every landlord's position differs by ownership, mortgage, other income and residence. Our 45 minute online property tax consultation with a Chartered Tax Adviser covers your own figures.
Questions and answers
1. Do I pay tax on rental income below £1,000? The first £1,000 of property income is covered by the property allowance. If your gross property income is within it you will not normally need to declare it, but check first if you have other property or trading income.
2. Can I claim the cost of a new boiler? Replacing a broken boiler with a like-for-like model is usually a repair and can be claimed. Installing a heating system where none existed is an improvement and cannot.
3. Does the non resident landlord scheme mean I pay tax twice? No. It collects tax on account. You still report the income and the tax already paid is taken into account.
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4. Do I pay tax if my property made a loss? No tax is due for that year. A rental loss can usually be carried forward against future profits of the same property business.
