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Rental Income Tax Calculator UK
Calculate tax on buy-to-let rental income including mortgage interest relief.
Salary, pension, etc. (determines your tax rate)
Management Fee10%
Void Weeks/Year4
Net Annual Income (after tax)
£2,761
£230/month
Gross Rent
£14,400
Tax on Rent
£690
Tax Rate
20%
Income & Expenses
Gross Annual Rent£14,400
Void Loss (4 weeks)-£1,109
Management (10%)-£1,440
Repairs & Insurance-£2,400
Taxable Profit£9,451
Tax at 20%-£1,890
Mortgage Interest Tax Credit (20%)+£1,200
Mortgage Interest Paid-£6,000
Net Income£2,761
How Rental Income Tax Works
Rental income is added to your other income and taxed at your marginal rate. You can deduct allowable expenses (repairs, insurance, management fees, letting agent costs) but NOT mortgage capital repayments.
Mortgage Interest Relief
Since April 2020, landlords can no longer deduct mortgage interest from rental income. Instead, you receive a 20% tax credit on mortgage interest paid. This particularly impacts higher-rate taxpayers who effectively pay 40% tax on gross rent but only get 20% relief on mortgage interest.