MTD for Property Income: Landlord Guide

If you earn income from UK property, MTD applies to you just as it does to self-employed sole traders. Rental income counts towards the £50,000 gross income threshold, and if you are above it, you must keep digital records and submit quarterly updates from April 2026.

How Property Income Fits Into MTD

Under MTD, property income is treated as a separate income source alongside any self-employment income. Your quarterly updates must include:

• Total rent received during the quarter
• Allowable expenses categorised correctly (mortgage interest treated as a tax credit, not a deduction for individual landlords)
• Net profit or loss for the quarter

If you have both self-employment income and property income, you submit separate sections within the same quarterly update — one for your trade and one for your property business.

What Expenses Can Landlords Claim?

Allowable property expenses include:

• Letting agent and management fees
• Insurance (buildings and landlord liability)
• Repairs and maintenance (not improvements)
• Ground rent and service charges
• Council tax (if paid by you as landlord)
• Utility bills (if included in the rent)
• Legal fees for lets of a year or less
• Accountancy fees
• Travel to properties for inspections
• Advertising for tenants
• Replacement of domestic items (furnished lets)

Remember: mortgage interest is no longer deductible as an expense for individual landlords. You receive a 20% tax credit instead, which is handled separately in the tax calculation.

Multiple Properties

All your UK rental properties are treated as a single property business for MTD purposes. You do not submit separate quarterly updates for each property — they are consolidated into one submission.

However, keeping per-property records in your software is strongly recommended. It helps you understand which properties are profitable, makes it easier to respond to HMRC queries, and is essential if you sell a property and need to calculate capital gains.

Accounted lets you track income and expenses per property while automatically consolidating them for MTD submission.

Setting Up for Property Income

1. List all your properties in your software with addresses and tenant details
2. Set up recurring income entries for monthly rent received
3. Connect your bank to automatically capture mortgage payments, insurance, and agent fees
4. Create categories for property-specific expenses
5. Set rules for recurring transactions so they are categorised automatically

Common Landlord Pitfalls

Claiming improvements as repairs. A new extension is an improvement; fixing a leaking roof is a repair. Only repairs are deductible.

Forgetting to apportion. If you use a property partly for business and partly personally, only the business portion of expenses is claimable.

Missing the mortgage interest change. Individual landlords can no longer deduct mortgage interest. If your software still shows it as an expense, check the settings.

Ignoring void periods. Expenses during void periods (when the property is empty between tenants) are still allowable, provided you intend to re-let.

Accounted handles your bookkeeping, tax estimates, and MTD submissions automatically. Start your free trial — no credit card required.