Property income tax calculator 2027
From 6 April 2027 rental profit gets its own, higher Income Tax rates. Add Section 24 and the £100,000 allowance taper, and some landlords will pay more tax than the property makes. Enter your figures to compare 2026/27 with 2027/28.
Your figures for a year
Whole property, for the year
Repairs, agent fees, insurance, etc. Not mortgage interest
Interest and other finance costs only, not capital repayments
Your salary, pension or self-employed profit, before tax
Your tax: 2026/27 vs 2027/28
Your share: rent £30,000, expenses £5,000, interest £15,000.
| 2026/27 | 2027/28Current law | |
|---|---|---|
| Taxable rental profitRent minus expenses, before interest | £25,000 | £25,000 |
| Personal allowanceAfter the £100,000 taper | £70 | £70 |
| Tax on rental profit | £10,000 | £10,500 |
| Extra tax on other incomeFrom a smaller personal allowance | £5,000 | £5,000 |
| Section 24 credit | −£3,000 at 20% | −£3,300 at 22% |
| Tax because of your rentalNet tax | £12,000 | £12,200 |
| Profit after mortgage interest | £10,000 | £10,000 |
| Effective tax rate on rental profitTax ÷ (rent − expenses − interest) | 120%Over 100% of profit | 122%Over 100% of profit |
| Change year on year | Up £200 | |
Warning: in 2027/28 you'd pay more tax than this rental makes. Because of Section 24, mortgage interest isn't deducted before tax is worked out; it only earns a 22% credit, while the profit before interest can be taxed at 42% or 47%. Your rental profit also takes your income over £100,000, which shrinks your personal allowance and raises the tax on your other income.
Are you in Making Tax Digital?
MTD for Income Tax depends on your qualifying income: your share of rent plus any self-employment turnover, before expenses. Salary and pensions don't count.
Gross sales, before expenses
Your qualifying income: £30,000 a year
- MTD from 6 April 2026 (over £50,000 in 2024/25): No, not over
- MTD from 6 April 2027 (over £30,000 in 2025/26): No, not over
- MTD from 6 April 2028 (over £20,000 in 2026/27): Yes, you're over
If your qualifying income stays at this level, you'd need MTD from 6 April 2028. HMRC uses the figure from your tax return for the year shown (GOV.UK).
Know your real figures before April 2027
RentFig records rent, expenses and mortgage interest as they happen, so your profit and Section 24 figures are ready for Self Assessment and quarterly MTD updates. Free plan for up to 2 tenancies.
An estimate for individual landlords in England with salary and rental income only, not tax advice. It doesn't cover Scotland, Wales, companies, savings, dividends or carried-forward losses.
How the estimate works
- Taxable rental profit is your share of rent minus allowable expenses. Mortgage interest is not deducted; it gives a credit at the property basic rate instead.
- Your personal allowance (£12,570, the same in both years) goes against your other income first. It shrinks by £1 for every £2 of income over £100,000 (GOV.UK).
- Bands are the same in both years: basic rate on the first £37,700 of taxable income, additional rate above £125,140 (Budget 2026 rates and allowances).
- Rental profit is taxed on top of your other income, at the property rates (HMRC technical note, Finance Act 2026 s7).
- “Tax because of your rental” is your total Income Tax with the rental minus your total without it, so it includes any extra tax on your salary from a smaller personal allowance.
What it leaves out
It assumes salary (or pension or self-employed profit) plus rental profit only. It doesn't cover savings interest, dividends, pension contributions, Gift Aid, the marriage allowance, the £1,000 property allowance, losses or unused interest carried forward, Scotland, or limited companies.
Property income tax 2027: FAQ
- What are the property income tax rates from April 2027?
- Under current law (Finance Act 2026), rental profit for landlords in England is taxed at its own rates from 6 April 2027: 22% basic, 42% higher and 47% additional. Budget 2026 (29 October 2026) proposes raising these to 24%, 44% and 49%; that is not yet law and needs Finance Bill 2026-27 to pass. In 2026/27 rental profit is still taxed at 20%, 40% and 45%.
- What happens to mortgage interest relief (Section 24)?
- You still can't deduct mortgage interest from rental profit. Instead you get a tax credit at the property basic rate: 20% in 2026/27 and 22% in 2027/28 under current law. If you pay the higher property rate, the gap between 42% tax on the profit and a 22% credit on the interest grows.
- How can tax be more than 100% of my rental profit?
- Tax is charged on rent minus expenses, before mortgage interest, but the interest only earns a basic-rate credit. If your income is between £100,000 and £125,140, rental profit also takes away £1 of personal allowance for every £2, so tax on your salary goes up too. With a big mortgage the total extra tax can be larger than the cash the property actually made.
- Is personal allowance used against rent or salary first?
- Against salary, pension and other non-property income first. From 2027/28 property income is taxed after employment, trading and other income but before savings and dividends, so rental profit tends to fall into the higher bands.
- Does this apply in Scotland, Wales or to limited companies?
- No. This calculator is for individual landlords in England. Scotland sets its own rates and bands, Wales can set its own property income rates, and companies pay Corporation Tax rather than Income Tax on rental profit.
- What counts as qualifying income for Making Tax Digital?
- Qualifying income is your gross property income plus self-employment income, before expenses. Salary and pensions don't count. For jointly owned property, only your share counts. You must use MTD for Income Tax if qualifying income is over £50,000 (from 6 April 2026), £30,000 (from 6 April 2027) or £20,000 (from 6 April 2028), based on an earlier year's tax return.
Disclaimer: This is an estimate to help you plan, not tax advice. Your own tax depends on things this tool doesn't ask about. Check with HMRC or a qualified accountant before you make decisions.