How Much Tax on Rental Income? Quick Calculator

Quick Tax Estimates

Your tax on rental income depends on your total income from all sources and your allowable expenses. Here are quick estimates for 2025/26.

If Rental Income Is Your Only Income

| Annual Rental Profit | Tax Due | |---------------------|---------| | £12,570 or less | £0 (covered by Personal Allowance) | | £15,000 | £486 | | £20,000 | £1,486 | | £30,000 | £3,486 | | £40,000 | £5,486 | | £50,000 | £7,486 |

These figures assume no other income and no mortgage interest.

If You Also Have Employment Income

The tax on your rental income depends on what tax band it falls into. If your employment income uses up your Personal Allowance and basic rate band, your rental income may be taxed at 40%.

Example: £45,000 salary + £10,000 rental profit

• Total income: £55,000
• £4,730 of rental profit falls in the higher rate band (income above £50,270)
• Tax on rental profit: approximately £2,946 (£5,270 × 20% + £4,730 × 40%)

Do Not Forget Section 24

If you have a mortgage, your rental profit is calculated before deducting mortgage interest. You receive a 20% tax credit on the interest, but your taxable income is higher. For higher rate taxpayers, this increases the effective tax significantly.

Reducing Your Tax

1. Claim all allowable expenses — repairs, insurance, agent fees, travel
2. Use the right structure — consider company ownership if you are a higher rate taxpayer with significant mortgages
3. Plan pension contributions — reducing your overall income can keep you in a lower tax band
4. Track everything — missed deductions mean overpaid tax

Get an accurate estimate with Accounted — Penny calculates your tax in real time.

---

Know your rental tax before it is due. Sign up for Accounted and see your property tax position throughout the year.