UK Rental Income Tax Calculator
Calculate tax on your rental property income for the 2025/26 or 2024/25 tax year. See your income tax, mortgage interest relief at 20%, and after-tax cash flow.
Insurance, repairs, agent fees, etc.
Interest only — not capital repayments
Employment, self-employment, or pension income
Tax on Rental Income
£2,986.00
Effective rate: 17.46%
After-Tax Cash Flow
£7,114.00
Annual net cash
Net Rental Income
£15,100
Before mortgage interest credit
| Item | Amount |
|---|---|
| Gross Rental Income | £18,000 |
| Vacancy Loss | −£900 |
| Effective Rental Income | £17,100 |
| Operating Expenses | −£2,000 |
| Net Rental Income | £15,100 |
| Income Tax on Rental | £3,986.00 |
| Mortgage Interest Relief (20%) | −£1,000.00 |
| Total Tax | £2,986.00 |
| Mortgage Interest Paid | −£5,000 |
| After-Tax Cash Flow | £7,114.00 |
Frequently asked questions
How is rental income taxed in the UK?
Rental income is added to your other income and taxed at your marginal income tax rate. You can deduct allowable expenses such as letting agent fees, insurance, repairs, and maintenance. However, mortgage interest is no longer deductible — instead you receive a 20% tax credit on the interest paid.
What is the mortgage interest tax relief for landlords?
Since April 2020, landlords can no longer deduct mortgage interest from rental income. Instead, they receive a basic rate (20%) tax credit on their mortgage interest payments. This means higher and additional rate taxpayers pay more tax on rental income than before the 2017 changes.
What expenses can I deduct from rental income?
Allowable expenses include letting agent fees, buildings and contents insurance, maintenance and repairs (not improvements), council tax (if paid by you), utility bills (if paid by you), ground rent and service charges, accountancy fees, legal fees for lets of a year or less, and direct costs such as advertising for tenants.
Sources
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