UK Buy-to-Let Tax Calculator 2026/27
Calculate UK landlord income tax for the 2026/27 tax year, including the Section 24 mortgage interest restriction. Mortgage interest is no longer deductible from rental income — instead you get a flat 20% basic-rate tax credit. Higher and additional rate landlords pay significantly more tax than under the old rules.
| Annual Rental Income | — |
| Allowable Expenses (excl mortgage interest) | — |
| Taxable Rental Profit | — |
| Total Taxable Income (with profit) | — |
| Income Tax Before S.24 Credit | — |
| Section 24 Credit (20% × interest, capped) | — |
| Net Tax on Rental | — |
| After-Tax Cash Flow (Profit − Tax) | — |
How UK Buy-to-Let Tax Works in 2026/27
Since April 2020, UK landlords (individuals, not companies) have been unable to deduct mortgage interest from their rental income. Instead, you get a basic-rate (20%) tax reduction — the Section 24 mortgage interest restriction. This was phased in from 2017-2020 and is now fully in force for the 2026/27 tax year (source: gov.uk Section 24 guidance).
The practical effect: rental profit is calculated before mortgage interest, pushing many landlords into a higher tax band. The 20% credit then partially offsets this, but for higher-rate (40%) and additional-rate (45%) landlords, the credit is worth less than the original deduction would have been. This is why many landlords have transitioned to limited company ownership, where mortgage interest remains a fully deductible expense.
2026/27 UK Tax Bands (England, Wales, NI)
Personal allowance: £12,570 (frozen until 2028 per the 2024 Autumn Statement). Basic rate (20%): £12,571 to £50,270. Higher rate (40%): £50,271 to £125,140. Additional rate (45%): over £125,140. Personal allowance tapers to zero between £100,000 and £125,140 (£1 reduction per £2 of income above £100K) (source: gov.uk income tax rates).
Scotland has different bands: starter (19%), basic (20%), intermediate (21%), higher (42%), advanced (45%), top (48% from 2024). The calculator above uses the rest-of-UK bands by default; select Scotland for those rates.
The £1,000 Property Allowance
If your gross annual property income is £1,000 or less, it is automatically tax-free and you do not need to report it. If it is between £1,000 and £2,000, you can either deduct the £1,000 allowance OR your actual expenses, whichever is more advantageous. Above £2,000 gross, expenses become more valuable than the allowance for most landlords.
For broader UK self-assessment, see our self-assessment tax calculator. For limited company landlord comparison, the corporation tax calculator shows the alternative tax route.
Section 24 Loophole Closures
HMRC continues to monitor structures designed to circumvent Section 24 — including spousal income shifting, partnership conversions, and incorporation. Recent FTT case law has tightened the "incidence of beneficial ownership" rules, making non-genuine income-splitting harder to defend. Always discuss any structural change with a qualified UK tax advisor before implementing.
Last updated April 2026. Sources: gov.uk Section 24 guidance, gov.uk tax rates, HMRC.