Does this choose the property allowance for me?

No. This estimate uses actual allowable running expenses. Eligibility for the property allowance and how it interacts with expenses and finance-cost relief require separate checks.

Residential rental-income tax calculator (2026/27)

Estimate the Income Tax increase and cashflow from an individual residential letting.

Enter your figures

2026/27 estimate for England, Wales or Northern Ireland. Check the scope and assumptions below.

Annual gross residential rent (£)Allowable running expenses, excluding mortgage interest (£)Eligible residential finance costs for this year (£)Other annual non-savings income (£)

Taxable property profit: £15,500.00
Income Tax increase before finance-cost relief: £3,146.00
Current-year finance-cost tax reduction: £1,200.00
Estimated property Income Tax: £1,946.00
Annual property cashflow after entered costs and tax: £7,554.00
Monthly property cashflow: £629.50

What this estimate includes

Standard England/Wales/Northern Ireland non-savings Income Tax; individual residential property, not a company. No property allowance, losses, carried-forward finance costs, savings, dividends, pension or special reliefs. Finance costs must be eligible costs for this year; capital repayments are excluded.

Method and assumptions

Taxable property profit is rent less allowable running expenses, before residential finance costs. The tool applies progressive Income Tax to combined other income and property profit, then estimates the basic-rate finance-cost reducer using the lowest relevant current-year amount. It does not charge all property profit at your highest marginal rate.

Sources and review

AfterTaxUK Editorial Team · reviewed 22 October 2026. A review date is separate from live deployment. Check your own records and current official guidance for individual decisions.

Frequently Asked Questions

Clear answers based on official HMRC rules and statutory guidance.

No. Enter eligible finance costs such as the relevant interest amount, not capital repayments. Residential finance-cost relief is restricted and may be carried forward under HMRC rules where limits apply; carry-forwards are not modelled here.

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Keep income, cash flow and tax separate

Rental receipts less the allowable expenses supported by the tool form the starting point. Mortgage capital repayments are not deductible rental expenses.

An individual residential landlord may receive a limited basic-rate finance-cost tax reduction rather than deducting interest from profit. Company ownership and furnished holiday letting transitional rules require their own treatment.

Check the rules for your circumstances

Official guidance supports the rules described here; it does not approve or certify this calculator. Confirm dates, eligibility and unsupported cases before making a financial decision.