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Landlord Tax Calculator 2027: What the New Property Rates Cost You

How much more tax will landlords pay from April 2027?

From 6 April 2027 rental profit is taxed at its own rates. The law today says 22%, 42% and 47%; Budget 2026 (28 October 2026) announced 24%, 44% and 49%, not yet law. The mortgage-interest reducer rises to the same basic rate. A basic-rate landlord with £15,000 profit and £6,000 interest pays £360 more at the announced rates.

The rise is not a flat two or four points on your rent. It falls on your profit, the mortgage-interest reducer goes up with it, and your personal allowance now goes against your salary first, so the answer depends on your own numbers.

Type your share of rent, costs and mortgage interest, and your other income, to see 2026-27 against both versions of 2027-28 and when Making Tax Digital starts for you.

Use the calculator All free tools

Built by Muhammad Shahzeb Anwar, MSc Industrial and Organizational Psychology. England, Wales and Northern Ireland; individual landlords. Scotland sets its own property rates and is not covered.

The calculator

Work out your 2027 landlord tax

Runs in your browser. Nothing you type is stored or sent anywhere.

Your rental figures for the year (your share)

Before any costs. If you own half, type half.
Letting fees, repairs, insurance and so on. Not mortgage interest.
These get a tax reducer instead of a deduction.
With the allowance you can't claim the finance-cost reducer.

You

Salary, pensions, self-employed profit. Not savings or dividends.
Your share of gross rents plus gross self-employment turnover.
Same test. 2026-27 uses the gross rent above.

    What changes on 6 April 2027

    Until 5 April 2027 rental profit is taxed at the main rates, 20%, 40% and 45%, like a salary. From 6 April 2027 it has its own property rates. The Finance Act 2026 (section 7) sets them at 22%, 42% and 47% for 2027-28. At Budget 2026 on 28 October 2026 the government announced a further two points, 24%, 44% and 49%, to be legislated in the Finance Bill 2026-27. The bands do not move: £12,570 personal allowance, £37,700 basic-rate band, additional rate above £125,140 of taxable income.

    Two quieter changes matter as much. Your personal allowance is now set against your salary, pension or trading profit first, and property profit is taxed on top of that income. And the reducer for mortgage interest is given at the property basic rate instead of 20%.

    A worked example

    Salary £45,000. One flat: rent £18,000, costs £3,000, mortgage interest £6,000. Property profit is £15,000 (interest is not deducted). After the £12,570 allowance the salary uses £32,430 of the £37,700 basic-rate band, so £5,270 of the profit is in the basic band and £9,730 in the higher band.

    2026-27: £6,486 on the salary + £4,946 on the profit − £1,200 reducer (20% of £6,000) = £10,232. 2027-28, law today: £6,486 + £5,246 − £1,320 = £10,412 (+£180). 2027-28, Budget 2026 rates: £6,486 + £5,546 − £1,440 = £10,592 (+£360).

    The mortgage interest reducer (Section 24)

    Finance costs on a residential let are not deducted from rent. You get a tax reducer: the reducer rate times the lowest of your finance costs (plus any unused from earlier years), your property profit, and your income above the personal allowance. The rate is 20% for 2026-27 and the property basic rate from 2027-28: 22% under the law today, 24% if the Budget 2026 change is passed. Anything not used carries forward, and the reducer cannot create a refund. If you use the £1,000 property allowance instead of expenses, you cannot claim the reducer at all.

    Making Tax Digital for landlords

    MTD for Income Tax uses qualifying income: your share of gross rents plus gross self-employment turnover, before expenses. Over £50,000 in 2024-25 meant MTD from 6 April 2026; over £30,000 in 2025-26 means 6 April 2027; over £20,000 in 2026-27 means 6 April 2028. Quarterly updates are cumulative from 6 April and due on 7 August, 7 November, 7 February and 7 May. Budget 2026 announced that no late-submission penalty points will be applied to quarterly updates in 2027-28; the updates are still required.

    Common mistakes

    Testing MTD on profit instead of gross rent. Counting the whole rent on a jointly owned property instead of your share (spouses living together are usually taxed 50:50 unless both have declared unequal beneficial interests). Assuming the new rates add two or four points to every pound of rent; they apply to profit, and the bigger reducer offsets part of the rise. Forgetting that unused finance costs carry forward.

    Before you rely on this

    What this will not tell you

    This is an estimate for one tax year. It covers individual landlords in England, Wales and Northern Ireland with one combined rental figure. It does not cover Scotland (the Scottish Parliament sets its own property rates), companies, savings or dividend income, pension contributions or Gift Aid, rent-a-room relief, capital gains, National Insurance or non-residents, and it does not fill in or check a tax return. The Budget 2026 rates are announced, not yet law. Nothing you type leaves your browser.

    Questions

    Questions people actually ask

    What are the property income tax rates from April 2027?

    Under the Finance Act 2026: 22% basic, 42% higher and 47% additional, for England, Wales and Northern Ireland. Budget 2026 (28 October 2026) announced 24%, 44% and 49% instead, to be legislated in the Finance Bill 2026-27.

    Does the mortgage interest tax credit go up in 2027?

    Yes. From 2027-28 the finance-cost reducer is given at the property basic rate instead of 20%: 22% under the law today, 24% if the Budget 2026 rates are passed.

    Do the new property rates apply in Scotland?

    Not automatically. The Finance Act 2026 lets the Scottish Parliament set its own property rates. This calculator does not cover Scotland.

    Do the new rates apply to limited companies?

    No. They are income tax rates for individuals (and trusts). Companies pay corporation tax on rental profits.

    Is MTD for landlords based on rent or profit?

    Gross rent. Qualifying income is your share of property income plus self-employment turnover before expenses. Over £30,000 in 2025-26 means MTD from 6 April 2027.

    How is rent from a jointly owned property split?

    Spouses and civil partners living together are usually taxed 50:50, unless both declare unequal beneficial interests and the income follows them. Other joint owners usually follow their ownership share.

    Can I use the £1,000 property allowance and claim mortgage interest?

    No. If you use the property allowance you cannot deduct other expenses or claim the finance-cost tax reducer.

    Where every rule comes from

    Sources

    Checked against the legislation and HMRC guidance on 2 November 2026. The Budget 2026 rates are announced and not yet law; if a source below has moved on, the source wins over this page.

    1. Finance Act 2026, section 7: property rates for 2027-28: https://www.legislation.gov.uk/ukpga/2026/11/section/7/enacted
    2. Budget 2026 overview of tax legislation and rates, Annex A: https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances
    3. Budget 2026 overview of tax legislation and rates (measures 1.2 and 2.36): https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar
    4. HMRC technical note: tax rates for property, savings and dividend income: https://www.gov.uk/government/publications/changes-to-tax-rates-for-property-savings-and-dividend-income/change-to-tax-rates-for-property-savings-and-dividend-income-technical-note
    5. How the finance-cost tax reduction is worked out: https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies
    6. Tax-free allowances on property and trading income: https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
    7. Income Tax rates and allowances: https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past
    8. Check if you need to use Making Tax Digital for Income Tax: https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax
    9. Work out your qualifying income for Making Tax Digital for Income Tax: https://www.gov.uk/guidance/work-out-your-qualifying-income-for-making-tax-digital-for-income-tax
    Citation

    Cite this tool

    Free to use and free to quote. If a figure here is useful in something you are writing, a link back is all that is asked.

    Muhammad Shahzeb Anwar, MSc Industrial and Organizational Psychology. Landlord Tax Calculator 2027. Shahzeb Speaks. https://www.shahzebspeaks.com/landlord-tax-calculator-2027/

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