Skip to main content

Buy to let tax calculator

Complete the fields of our buy to let tax calculator to see an illustration of how much tax may be due on your rental income only (not your overall tax position).

To be clear on your tax position, you should always consult a qualified tax professional.

IMPORTANT PLEASE READ

The information provided on this website was, and the documents that can be downloaded from this website were, believed to be correct at the time that they were first added to, or made available for download from, this website. This calculator is for information only. No responsibility is taken for its use. Residents of Scotland should note that the tax position in Scotland differs from England and will render inaccurate results.

However, law, guidance and practice affecting the documents and information may have changed since that time and if you intend to use the information or documentation in a manner that may expose you or others to liability or loss you should have the information and/or documents reviewed by, and seek advice on it and them from, a person with the appropriate technical skills and expert knowledge before using or relying on such information or documentation.

Use of this website is subject to our terms and conditions for its use, which also apply to documents downloaded via this website and other information and documents accessed via this website.

Buy to let tax calculator

WARNING

This document has been downloaded from the website www.commercialtrust.co.uk (“Website”) and has been made available by Commercial Trust Limited (“We”) on and subject to the terms of use of the Website, to which terms of use the person downloading the document has agreed by their use of the Website and/or downloading this document.

This document is for guidance only. We give no advice nor make any recommendation regarding its suitability in any particular circumstances or for any particular purpose.

Accordingly, this document must not be used for any purpose until it has been adapted to reflect the circumstances in which it is intended to use it and must not be used for any purpose until advice has been obtained in respect of it from, and it has been reviewed by, a person with the appropriate technical skills and knowledge. This is because, for example, the law, guidance and practice affecting this document and its subject-matter and the circumstances in which you intend to use the document may be different from those in effect or contemplation when it was produced. Failure to adhere to these instructions my cause loss, costs or give rise to avoidable liabilities. We do not accept any liability in respect of any loss, cost or liability (whether or not avoidable in each case) that may be suffered or incurred as a result of using this document or any part of this document.

If you choose to pass this document to any other person, whether to seek advice or for any other purpose you must not delete this warning before doing so. Use of this document by the person downloading it and any other person to whom the person downloading it may provide it may give rise to a liability for the person who downloaded it.

Property income and expenses

MonthlyAnnual
Gross rental income
£
Field contains invalid characters.
£
Field contains invalid characters.
Property management fees
£
Field contains invalid characters.
£
Field contains invalid characters.
Property insurance
£
Field contains invalid characters.
£
Field contains invalid characters.
Property repairs
£
Field contains invalid characters.
£
Field contains invalid characters.
Other allowable expenses
£
Field contains invalid characters.
£
Field contains invalid characters.
Allowable expenses total
£
Field contains invalid characters.
£
Field contains invalid characters.
Financial cost calculator
Buy to let mortgage amount
£
Field contains invalid characters.
Mortgage interest rate
%
Field contains invalid characters.
Annual mortgage interest
£
Field contains invalid characters.

Other income

MonthlyAnnual
Gross employment income
£
Field contains invalid characters.
£
Field contains invalid characters.
Gross trading income
£
Field contains invalid characters.
£
Field contains invalid characters.
Total income (exc. property)
£
£

Estimated income tax liability on property income

£
Google logo
Google logo

4.7/5 • 279 reviews

Income tax calculations

Property income
£
Employment / trading income
£
Total income
£
Less:
Personal allowance
£
Taxable income
£
Income tax
Basic rate
£
x 20%
£
Higher rate
£
x 40%
£
Additional rate
£
x 45%
£
Less:
Residential landlord tax relief
£
Income tax liability
£

Annual property income calculations

Gross rental income
£
Less:
Property allowance
£
Allowable expenses
£
Property income
£

Property income tax calculations

Property Income
£
Income Tax
Basic rate
£
x 20%
£
Higher rate
£
x 40%
£
Additional rate
£
x 45%
£
Less:
Residential landlord tax relief
£
Income tax liability
£

Working out the tax on your buy to let income

The buy to let tax calculator will give you an indication of the amount of tax you may need to pay on your rental income. Make sure you get an accurate picture of your tax position from a qualified tax professional.

You will need tax figures in order to work out potential profits from your buy to let.

You can check to see alternative buy to let mortgage options, which may mean lower monthly payments, so could help to reduce tax due on a buy to let property.

Since the way buy to let tax changed, many landlords have investigated whether investing in property through a limited company would be more profitable for them. Visit our page on buy to let mortgages for limited companies for more information on these products.

Some landlords have diversified their investments into property types that offer potentially higher yields.

Houses of Multiple Occupation typically offer high yields because there are multiple rents from one property. We can help you with this investment route, whether you want to start small, or need an HMO mortgage for a larger property.

Holiday lets can also offer higher yields than long-term lets, because the rental income tends to be higher, although it can fluctuate throughout the year. Holiday let mortgages are available for traditional and AirBnB style shorter lets.

Changes to buy to let mortgage taxation

In 2015 Summer Budget, George Osborne made a huge change to buy to let mortgage interest tax relief, which reduced the allowance to a flat 20%. The change was phased in from the tax year 2017-18.

Previously buy to let mortgages had enjoyed a higher level of tax relief than a standard residential mortgage.

Landlord tax after buy to let interest relief withdrawal

Starting in the 2017–18 tax year, HMRC incrementally restricted tax relief for buy to let mortgage interest as follows:

75% in 2017–18
50% in 2018–19
25% in 2019–20
0% in 2020–21 onwards

In its place, individuals have since been able to claim a tax reduction, which is calculated as 20% of the lower of:

  • Finance costs not offset against income in the tax year
  • Total taxable profits of the property business in the tax year*
  • Total income (excluding that from dividends and savings) that exceeds the personal allowance and blind person's allowance (if applicable) in the tax year*

Source: www.gov.uk

* If this is the figure used, any excess mortgage interest may be carried forward to the following year

More calculators

Calculator icon with four buttons in blue colour, with a plus icon, percentage icon, times icon and equals icon.

Buy to let mortgage calculator

Go to calculator
Calculator icon with four buttons in blue colour, with a plus icon, percentage icon, times icon and equals icon.

HMO mortgage calculator

Go to calculator
Calculator icon with four buttons in blue colour, with a plus icon, percentage icon, times icon and equals icon.

Holiday let mortgage calculator

Go to calculator
Calculator icon with four buttons in blue colour, with a plus icon, percentage icon, times icon and equals icon.

Limited company buy to let mortgage calculator

Go to calculator
Calculator icon with four buttons in teal colour, with a plus icon, percentage icon, times icon and equals icon.

Bridging loan calculator (short-term borrowing)

Go to calculator
Calculator icon with four buttons in green colour, with a plus icon, percentage icon, times icon and equals icon.

Commercial mortgage calculator (for business premises)

Go to calculator