Landlord Tax Calculator
Calculate Your Rental Tax Accurately with Taxd's User-Friendly Rental Tax Calculator. Simplify Rental Tax Filing for Property Owners and Landlords
| Threshold income | £100,000.00 |
|---|---|
| Adjusted income | £87,430.00 |
| Pension contributions | £5,330.10 |
| Allowance | £27,432.00 |
| Amount exceeding | £67,237.90 |
NOTE: Your results will not be saved. This calculator should be used for estimations, capital gains is complicated with potential reliefs available, please get in touch if you have any queries.
Tax on Rental Income
The tax relief that landlords of residential properties get for finance costs is restricted to the basic rate of Income Tax and was gradually phased in from 6 April 2017. It is fully in place from 6 April 2020.
Rate of tax
The rate of tax you’ll pay on rental income depends on your total income for the year (for example, from wages or a pension).
Example
This example explains how tax on Raj’s rental profit is worked out.
Raj received £14,300 rental income in the 2017 to 2018 tax year. He has £1,500 allowable expenses in the 2017 to 2018 tax year, and he received no other income in the year.
Step 1 - calculating the net rental profit
To work out how much tax he needs to pay, Raj first needs to deduct his allowable expenses from his rental income.
| Rental income | £14,300 |
|---|---|
| Minus allowable rental expenses | £1,500 |
| Rental profit | £12,800 |
Step 2 - deducting the personal allowance
Raj then deducts his personal allowance (the amount he earns before tax is due) for the year. Raj is entitled to a personal allowance of £11,500 for the 2017 to 2018 tax year. As Raj has no other income, he can use the full allowance for his rental income in this tax year.
| Rental profit | £12,800 |
|---|---|
| Minus the year’s personal allowance | £11,500 |
| Total taxable rental profit | £1,300 |
Step 3 - working out the correct rate of tax
For the 2017 to 2018 tax year, the first £33,500 of taxable income, after the personal allowance has been deducted, is charged at 20%. This applies to Raj, as his taxable rental profit is £1,300.
| Total taxable rental profit | £1,300 |
|---|---|
| 20% basic rate Income Tax | £260 |
| Tax due on rental profit | £260 |
Typical maintenance and repair costs
These include typical maintenance and repair costs that you are likely to incur, and which you can claim against your rental income:
- repairing water or gas leaks, burst pipes
- repairing electrical faults
- replacing broken windows, doors, gutters, roof slates/tiles
- repairing internal and external walls, roofs, floors
- repainting and redecorating (but not improving) the property to restore it to its original condition
- treating damp or rot
- re-pointing, stone cleaning
- hiring equipment to carry out necessary repair work
- replacing existing fixtures and fittings, such as radiators, boilers, water tanks, bathroom suites, and kitchens, but not electrical or gas appliances
