Property income tax 2027-28 calculator
For landlords in England, Wales and Northern Ireland, from 6 April 2027.
From 6 April 2027 rental profit gets its own income tax rates: 24% basic, 44% higher and 49% additional, up from 20%, 40% and 45% in 2026-27. See what that means for your rental profit.
The 24%, 44% and 49% rates were announced on 29 October 2026 and are subject to legislation in Finance Bill 26-27. Finance Act 2026 currently sets them at 22%, 42% and 47%. Estimate only, not tax advice; check with HMRC or an accountant.
How much more tax will you pay on rental profit?
For individual landlords who are not Scottish taxpayers. Amounts are yearly and stay on your device.
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- Both years use the Personal Allowance of £12,570, cut by £1 for every £2 of income over £100,000, a £37,700 basic rate band and the additional rate above £125,140, as in the GOV.UK Budget 2026 rates annex.
- 2026-27: rental profit is taxed at the main rates, 20%, 40% and 45%. 2027-28: at 24%, 44% and 49%. Other income stays at 20%, 40% and 45%.
- 2027-28: the Personal Allowance is set against your salary, pension or trading income first, and that income fills the bands before your rental profit.
- Mortgage interest is not deducted from profit. You get a tax reduction on the lower of your finance costs, rental profit and income above the Personal Allowance: 20% in 2026-27 and the property basic rate (24%) in 2027-28. It cannot take your tax below zero.
- Not included: savings and dividend income, the £1,000 property allowance, losses and unused finance costs carried forward, Marriage Allowance, pension contributions or Gift Aid that change adjusted net income, jointly owned property splits, furnished holiday lets, and National Insurance. Scottish taxpayers and companies are out of scope.
- Not yet confirmed: the 29 October 2026 paper does not mention finance cost relief separately. We use 24% because Finance Act 2026 gives the relief at the property basic rate; check this when Finance Bill 26-27 is published.
Property income tax 2027: common questions
What are the property income tax rates from April 2027?
The government announced on 29 October 2026 that from 6 April 2027 property income will be taxed at 24% (property basic rate), 44% (property higher rate) and 49% (property additional rate) for individuals in England, Wales and Northern Ireland. Finance Act 2026 currently sets these rates at 22%, 42% and 47%; the 24%, 44% and 49% rates are announced and subject to legislation in Finance Bill 26-27.
How is property income taxed in 2026-27?
For the 2026-27 tax year, property income is charged at the main income tax rates: 20% basic, 40% higher and 45% additional. The Personal Allowance is £12,570, reduced by £1 for every £2 of income over £100,000, and the additional rate applies above £125,140.
What happens to mortgage interest relief?
Mortgage interest on residential lets is still not deducted from rental profit. Instead you get a tax reduction on the lower of your finance costs, your property profits and your income above the Personal Allowance. That reduction is 20% in 2026-27. Finance Act 2026 gives it at the property basic rate from 2027-28, so this calculator uses 24% for 2027-28. The 29 October 2026 paper does not mention finance cost relief separately, so check this when Finance Bill 26-27 is published.
Which income uses up my Personal Allowance first?
From April 2027, GOV.UK says the Personal Allowance will be deducted from employment, trading or pension income first. Your salary or pension also fills the tax bands before your rental profit, so more of your rental profit can fall into the higher property rates.
Does this apply to Scottish landlords or companies?
No. Scottish taxpayers are out of scope here: the Scottish Parliament can set its own property rates and they have not been confirmed. Properties held in a limited company pay corporation tax, not these income tax rates.
Last updated . Sources:
- Income Tax: changes to tax rates for property and savings income (GOV.UK policy paper, 29 October 2026)
- Finance Act 2026, section 7: property rates for 2027-28 (currently 22%, 42%, 47%)
- Finance Act 2026, Schedule 1 para 40: finance cost relief given at the property basic rate
- Budget 2026 overview of tax legislation and rates, Annex A: rates and allowances (GOV.UK, 28 October 2026)
- Changes to tax rates for property, savings and dividend income (GOV.UK, 26 November 2025): Personal Allowance ordering
- HMRC Property Income Manual PIM2058: calculating the finance cost tax reduction
Estimate only, not tax advice; check with HMRC or an accountant.