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Rental income tax calculator

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Landlord earning rental income from a tenant in your home or a buy-to-let property? Quickly calculate how much you can expect to pay in rental income tax.
Where do you get this rental income from?
In which year did you earn this income?
Monthly rental income
£
Monthly mortgage interest
£
Other monthly rental expenses
£
Annual salary
£
(or pension, self-employment, etc.)
After-tax rental income
£14.6k
Tax
£3.4k
After-tax rental income
£14,640

You earned £18,000 from rent.

You can claim £3,600 as other rental expenses.

Your taxable rental income will be: £14,400.

£12,000 will be taxed at 20%: £2,400 in rental income tax.

£2,400 will be taxed at 40%: £960 in rental income tax.

Rental income tax you have to pay
£3,360

Common questions

You’re not alone. If you’ve got a question about tax we’ve probably heard it before and have an answer, or we can walk you through what to do.

More self-service guides and FAQs

Anything can be claimed as long as it relates directly to renting or maintaining the property:

  • agent fees, accountant fees, legal fees
  • rent (if you’re subletting), cleaning
  • most utilities

Three important things to keep in mind:

  • if your expenses are less than £1,000, don’t worry about receipts – just claim this flat £1,000 property allowance instead. Couples each get £1,000, so it’s double if you’re renting out a jointly owned property
  • if you made a rental loss last year (for example, couldn’t find a tenant), you can also claim it this year. It’s called “carrying forward a loss”
  • for anything that improves the value of the property (adding a patio, etc.), you can only claim them against your capital gains tax bill when you sell your property

Read more in our guide to allowable property expenses here

As long as you also live there, you can actually claim the first £7,500 as a flat tax relief.

It’s called the Rent-a-Room Scheme, and it’s one of the best tax reliefs landlords can get.

If you earn under £7,500 from rent, you don’t even need to declare it or submit a Self Assessment tax return.

Again, the only condition is that you also live at the property.

 

Read more about the Rent-a-Room Scheme here.

There are two situations:

1. If you also live at the property, you can claim the first £7,500 as a flat tax relief. If you earn less than that through Airbnb-ing your own home, you don’t even need to declare it.

2. If it’s a second property or a buy-to-let and earn over £2,500 from rental income (including Airbnb), you have to declare it and pay tax on it.

Read more in our guide for Airbnb hosts.

First, if you’re renting out a buy-to-let, you can only claim mortgage interest – not the full mortgage payments.

Second, starting in 2020 you will get a tax credit worth 20% of your finance costs instead.

What does this mean for you?

  • if you’re a basic rate taxpayer (meaning you earn under £50,000), you don’t need to worry
  • if you’re a higher rate taxpayer, it will mean a slightly higher tax bill – it all depends on how many buy-to-let properties you have. However, for most people it won’t be a huge change.

You can read more about the mortgage interest relief changes here

The UK tax year for individuals starts April 6th and ends April 5th of the following year. From then, you have until January 31st to complete your online tax return for the previous tax year.

More on tax dates can be found here

Need help paying tax on your rental income?

Figuring out how much tax you owe on your rental income is hard.

Correctly filing a Self Assessment tax return is even harder.

At TaxScouts, we do it for you online, fast, and for just £119, all in.

Click the button below and we’ll get you started.