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Know Your Tax Bill. Before It Arrives.
The UK landlord's rental income tax calculator — Section 24 mortgage interest restriction, personal vs limited company comparison, and allowable expense deductions.
Unlock Rental TaxSection 24 Explained
Section 24 removed the ability to deduct mortgage interest as an expense for individual landlords. Instead, you get a 20% tax credit. For higher-rate taxpayers, this can dramatically increase your tax bill — and even push you into a higher tax band. Propty shows the exact impact.
Ownership Structure
Limited company ownership avoids Section 24 — mortgage interest remains fully deductible against profits. But you pay corporation tax, and extracting money via dividends incurs additional tax. Propty models both routes to show which is cheaper for your specific situation.
Yes. If you have ended up letting a property you did not buy as an investment — an inherited house, a flat you could not sell, or a home you moved out of — enter the gross rent, the mortgage interest and your other income. The calculator applies the Section 24 restriction and shows the tax bill alongside the cash profit, which is the number most accidental landlords are actually trying to find.
If your gross rental income is over £1,000 in a tax year you must register for Self Assessment and declare it. Below £1,000 the property allowance covers you. The deadline is 31 January following the end of the tax year, and HMRC receives data from letting agents, the Land Registry and deposit schemes, so unreported income is usually found.
Rental income is added to your other income and taxed at your marginal rate — 20% (basic), 40% (higher), or 45% (additional). You can deduct allowable expenses (insurance, repairs, management fees) but mortgage interest is restricted under Section 24 for individual landlords. You get a 20% tax credit on mortgage interest instead.
Section 24 (fully phased in since April 2020) prevents individual landlords from deducting mortgage interest as an expense. Instead, you receive a basic-rate (20%) tax credit. For basic-rate taxpayers, the impact is neutral. But higher-rate taxpayers lose out significantly — and the gross rental income can push you into a higher tax band.
It depends on your tax band and portfolio size. Company ownership avoids Section 24, keeps mortgage interest fully deductible, and pays 25% corporation tax. But extracting profits via dividends incurs additional tax. Generally, higher-rate taxpayers with mortgaged portfolios benefit most from company ownership. Our tool calculates both routes.
Allowable deductions include: insurance, letting agent fees, maintenance and repairs (not improvements), ground rent, service charges, accountancy fees, legal fees for tenancy agreements, travel costs for property management, and the property income allowance (£1,000). Our tool lists every deduction to ensure you claim everything you're entitled to.
Yes — if your rental income exceeds £1,000/year (the property income allowance), you must file a Self Assessment tax return and declare it. Even if expenses exceed income (creating a loss), you should still report it as the loss can be carried forward. Registration deadlines apply — register by 5 October following the end of the tax year.