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What taxes do landlords have to pay in the UK?

  • 2 min read
  • Last updated 18 Jan 2024

There are five main types of tax that landlords have to pay:

1. Stamp Duty

Stamp duty is usually the first tax that landlords have to deal with. The Stamp Duty rate depends on the property purchase price:

Property purchase priceStamp duty
up to £125,0000%
£125,001 – £250,0002%
£250,001 – £925,0005%
£925,001 – £1,500,00010%
over £1,500,00012%

You pay an additional 3% in Stamp Duty if you’re purchasing:

  • A buy-to-let investment
  • A second home

Scotland and Wales have different rates and exemptions.

Want to work out what you owe in Stamp Duty? Check out our Stamp Duty calculator 👇

Your situation

Outlined number oneImage of an arrow
I am buying
Property cost
I am

Tax to pay

Outlined number two
  • Your property costs
    £500,000
    0% tax up to £300,000
  • Stamp Duty to pay
    £10,000

How your Stamp Duty Land Tax is calculated

The Stamp Duty you pay is calculated based on the price of the property you’re buying.

In your case, £500,000.

As you’re a first-time buyer, you don’t pay Stamp Duty Land Tax on the first £300,000 of your purchase.

You pay 5% Stamp Duty on amount up to £500,000. For you, this is £10,000.

Your Stamp Duty Land Tax total is £10,000.

2. Rental Income Tax

To calculate it, add the rent (minus expenses) to your other income sources: this determines your tax band.

IncomeTax rateDescription
up to £12,5700%Personal allowance
£12,571 to £50,27020%Basic rate
£50,271 to £125,14040%Higher rate
over £125,14145%Additional rate

Check out our guide to paying tax on rental income for more information.

This visual helps helps break it down 👇

Income tax rates UK

3. National Insurance

There are two types of National Insurance that you’ll need to pay:

  • Class 2 – £3.45 per week on income over £12,570 per year (From 6 April 2024 Class 2 National Insurance is being scrapped)
  • Class 4 – 9% (8% from 6 April 2024) of your rental income if you make more than £12,570 (or 2% if you earn over £50,270) per year

4. Capital Gains Tax (CGT)

You need to pay CGT when you sell property for a profit:

Overall annual incomeCGT rate (applies to your entire CGT profit)
below £50,27018%
over £50,00028%

You don’t pay CGT for:

Check out our CGT calculator for more details.

How you pay CGT on property:

  • Previously, you could pay your CGT bill either by filing a Self Assessment tax return or by using HMRC’s Real Time Capital Gains Tax Service
  • Starting from April 2020, all UK tax residents who sell property for a profit (except, of course, your home), have to use only the Real Time Capital Gains Tax Service
  • This means that you don’t need to file a Self Assessment anymore unless your income changes significantly during the year (there are different CGT rates if your income is under or over £50,270), or if you have another reason to file a tax return (for example, self-employment income)

5. Inheritance tax

Inheritance tax is a tax on everything you leave when you pass away (also called your “estate“):

Who owns the estateEstate valueInheritance tax
Youunder £325,0000%
Youover £325,00140%
Couple / Civil partnershipunder £650,0000%
Couple / Civil partnershipover £325,00140%
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