What taxes do landlords have to pay in the UK?

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.

You pay it when you buy any property in the UK.

The rate depends on the purchase price:

Property purchase price Stamp duty
up to £125,000 0 %
£125,001 - £250,000 2 %
£250,001 - £925,000 5 %
£925,001 - £1,500,000 10 %
over £1,500,000 12 %

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.

2. Rental Income Tax

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

Income Tax rate Description
up to £11,850 0 % Personal allowance
£11,851 to £46,350 20 % Basic rate
£46,351 to £150,000 40 % Higher rate
over £150,000 45 % Additional rate

Check out our income tax calculator for more information.

3. National Insurance

You need to pay Class 2 National Insurance on your rental income if:

  • HMRC decides that you have “a property business”, and
  • your profits are over £6,205 per year.

4. Capital Gains Tax (CGT)

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

Overall annual income CGT rate
below £45,000 18 %
over £45,000 28 %

Most people do it via their annual tax return.

You don't pay CGT for:

  • capital gains under £11,700.
  • selling your main home.

Check out our CGT calculator for more details.

5. Inheritance tax

Inheritance tax is a tax on everything you leave when you pass away (including properties):

Who owns the estate Estate value Inheritance tax
Yourself under £325,000 0%
Yourself over £325,001 40%
Couple / Civil Partnership under £650,000 0%
Couple / Civil Partnership over £325,001 40%

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