Tax for landlords

Renting out a property — even a single room or one flat — is taxable income, and it has its own set of rules that differ from self-employment. Here's what you can claim, and the one that catches everyone out.

If your rental income is more than £1,000 a year, you'll need to declare it. There's a £1,000 property allowance that covers you below that, similar to the trading allowance for the self-employed.

Rental expenses you can usually claim

• Letting agent and management fees.
• Repairs and maintenance — fixing what's already there, like a broken boiler or repainting.
• Buildings and contents insurance.
• Ground rent, service charges and any council tax or utilities you pay.
• Accountancy and other professional fees.

Mortgage interest works differently now

You can no longer simply deduct mortgage interest from your rental income as an expense. Instead, you get a tax credit worth 20% of the interest. For basic-rate taxpayers the effect is broadly similar; for higher-rate taxpayers it's less generous than the old rules, so it's worth getting the calculation right.

Making Tax Digital for landlords

Property income counts towards Making Tax Digital in the same way as self-employment. If your combined property and self-employment income is over the thresholds, you'll keep digital records and send HMRC quarterly updates as it rolls out from April 2026. It's a big change for landlords used to one annual return — and exactly what we're built to handle.

This guide is general information, not personal tax advice. Rules, rates and allowances can change at each Budget — always confirm the current position on GOV.UK or ask us to check your situation.