What does your rental really cost you in tax?
Whether you have a day job, work for yourself, or property is your income. Your bill under this year's rules, and what the new 22/42/47 property rates from April 2027 will add, a year before they bite.
Salary before tax. Leave empty if you have no job.
Income less expenses from working for yourself. Leave empty if none.
Everything your tenants pay you across the year.
Repairs, agent fees, insurance, ground rent. If under £1,000 the flat allowance is applied instead, automatically.
The interest part only, not capital repayments. Section 24 turns this into a tax credit rather than an expense.
Budget 2025 gave property income its own tax rates from April 2027, two points above the normal ones, and quietly changed how your personal allowance is used. Most landlords will find out when the bill arrives. Lekhio tracks your rents and costs all year, keeps the set aside number honest across your job, your trade and your property, and has the 2027 change already built into the figure you see, on your numbers, not in a headline.
Never get surprised by a Budget →A general estimate using 2026/27 rules and the announced 2027/28 property rates for England, Wales and Northern Ireland (residential lets, individual landlords). It is not tax advice or a filed figure. Your exact position depends on your full circumstances, which HMRC settles when you file. Lekhio prepares your figures and you always approve them.
Questions people ask
How is rental income taxed in 2026/27?
Rental profit (rents less allowable expenses, or less the £1,000 property allowance if that is better) is added to your other income and taxed at 20%, 40% or 45% in England, Wales and Northern Ireland, where Scotland has its own bands. Mortgage interest on residential lets is not an expense: you get a 20% tax credit on it instead, known as Section 24. Rental income carries no National Insurance.
What changes for landlords in April 2027?
From 6 April 2027 property income gets its own tax rates in England, Wales and Northern Ireland: 22% property basic rate, 42% property higher rate and 47% property additional rate, two points above the normal rates. The Section 24 mortgage interest credit moves to 22%. The personal allowance must also be set against earned income first. Announced at Budget 2025, HMRC expects around 2.4 million landlords to pay more.
Do landlords pay National Insurance on rent?
No. Rental income carries no National Insurance, which is the reason the government gave for the two point property rate rise from April 2027: to narrow the gap between tax on work and tax on income from assets.
What is the £1,000 property allowance?
You can deduct a flat £1,000 from rental income instead of actual expenses, whichever is better for you. If your total rents are under £1,000 there is usually nothing to tax and nothing to report. You cannot use both the allowance and actual expenses in the same year.