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Guide and calculator · Income Tax on rent

Landlord tax from April 2027.

From 6 April 2027, rental profit has its own Income Tax rates: 24%, 44% and 49%, four points above the rates on earnings. Mortgage interest relief rises to 24% to match. Work out what the change means for you.

Updated for Budget 2026. The Finance Act 2026 set 22%, 42% and 47%. The Budget on 28 October 2026 added two more points, to be legislated in the Finance Bill 2026–27. This page uses the announced rates.

For individual landlords in England and Northern Ireland. Wales and Scotland can set their own property rates from 2027–28; this page assumes Wales matches. An estimate for planning, not tax advice.

Rates checked against GOV.UK and the Finance Act 2026 on 7 November 2026.

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Your figures

Example values

Figures update as you type. Use your figures for a full tax year.

01Your rental business

Rental profit before mortgage interest

Your share of rent, minus allowable expenses such as letting fees, repairs and insurance. Do not take off mortgage interest here.Enter an amount of £0 or more.

Mortgage interest and other finance costs

Your share for the year. Interest only, not capital repayments.Enter an amount of £0 or more.

02Your other income

Salary, pension and self-employment profit

Before tax. Leave out savings interest and dividends; this calculator does not include them.Enter an amount of £0 or more.

Example values are illustrative only. Replace them with your own figures.

Extra Income Tax a year from April 2027Result from example values

£0

compared with the same figures taxed at 2026–27 rates

Income Tax at 2026–27 rates: £0
Income Tax at 2027–28 rates: £0
Difference: £0
2027–28 breakdown
Tax on rental profit in 2027–28: £0
Less mortgage interest relief at 24%: £0

What changes

An estimate, not tax advice. It uses the rates for England and Northern Ireland (Wales assumed the same until the Senedd sets its rates), the £12,570 Personal Allowance with its taper above £100,000, the £37,700 basic rate band and the £125,140 additional rate threshold, which stay frozen. It assumes your income is the same in both years and leaves out savings, dividends, rental losses brought forward, Gift Aid and pension contributions. Your 2027–28 payments on account are based on 2026–27, so most of any increase falls in the balancing payment due on 31 January 2029. Figures are rounded to the nearest pound.

01 The new rates

Rent is taxed four points higher.

From the 2027 to 2028 tax year, property income has its own rates. The bands do not change.

Band	Earnings	Rent 2026–27	Rent from April 2027
Basic rate£0 to £37,700	20%	20%	24%
Higher rate£37,701 to £125,140	40%	40%	44%
Additional rateover £125,140	45%	45%	49%
Mortgage interest relieftax reduction	—	20%	24%

Bands are taxable income after the Personal Allowance. The Personal Allowance (£12,570) and the basic rate band (£37,700) are frozen until April 2031. The Finance Act 2026 set 22%, 42% and 47%; Budget 2026 announced a further two points, to be legislated in the Finance Bill 2026–27. Mortgage interest relief is given at the property basic rate, so it follows. Sources: GOV.UK — Income Tax: changes to tax rates for property and savings income (Budget 2026); Finance Act 2026, sections 6 to 8 and 10, and Schedule 1 paragraph 40.

02 What changes

Three changes, one tax bill.

Higher rates on rent

Rental profit is taxed at 24%, 44% or 49%, depending on which band it falls in. Your salary, pension and self-employment profit keep the 20%, 40% and 45% rates.

Allowance goes on other income first

Your Personal Allowance is set against your other income first. Rent only gets the allowance that is left over, and is then added on top of your other income to find its band.

If your only income is rent, the allowance still covers the first £12,570.

Mortgage interest relief at 24%

Under Section 24 you still cannot deduct mortgage interest from rental profit. You get a tax reduction instead, and from April 2027 it is worked out at the property basic rate, 24%, rather than 20%.

Higher and additional rate landlords still get relief at 24%, not at their 44% or 49% rate.

Relief is given on the lowest of your finance costs, your property profit and your income above the Personal Allowance. Anything left over carries forward to later years.

03 Worked example

HMRC’s own example.

From HMRC’s technical note for the 2027 to 2028 tax year, which used the 22% rate. Shown here at the 24% announced in Budget 2026.

Employment income £30,000, less £12,570 Personal Allowance: £17,430
Employment income: £17,430 at 20%: £3,486
Property income: £3,000 at 24%: £720
Savings £400 and dividends £200, within their allowances: £0
Less finance cost relief: £1,000 at 24%: −£240
Income Tax due: £3,966

Source: GOV.UK — Change to tax rates for property, savings and dividend income: technical note, annex (£3,926 at the 22% rate), recalculated at the Budget 2026 rates.

04 Questions

Who it applies to.

Does it apply to property I own through a limited company?

No. Companies pay Corporation Tax on rental profit, not Income Tax, so these rates do not apply. Dividends you take from the company are taxed at the dividend rates, which rose to 10.75% and 35.75% from April 2026.

What about Scotland and Wales?

The 24%, 44% and 49% rates apply in England and Northern Ireland. The Scottish Parliament and the Senedd can set their own property rates from 2027 to 2028, and their budgets for that year are due soon. Until the Senedd sets its rates, this calculator assumes Wales matches. It does not cover Scottish rates. The new savings rates apply across the UK.

I own the property jointly. What do I enter?

Enter your own share of the profit and your own share of the finance costs. Each owner is taxed on their share at their own rates. If you are married or in a civil partnership, HMRC taxes jointly owned property 50:50 unless you have sent Form 17 declaring unequal shares, so enter half unless you have.

Does it change my savings and dividends too?

Yes. Savings interest is taxed at 24%, 44% and 49% from April 2027. Dividend rates rose from April 2026 to 10.75% and 35.75%; the additional rate stays at 39.35%. This calculator leaves savings and dividends out.

Does it affect trusts?

Yes. Trustees of discretionary and accumulation trusts pay 49% on property income from 2027 to 2028, and other trusts and estates pay 24%. This calculator is for individuals only.

Portfio

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03Dashboard

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Feature wording from portfio.app. Indicative modelling only.

Sources

Last checked against these pages on 7 November 2026. We review them every tax year.

Portfio does not provide tax, legal or financial advice. This calculator gives an estimate for planning only.