Key takeaways
- Landlords must report rental income on a Self Assessment return if it is more than £2,500 after allowable expenses or more than £10,000 before expenses.
- The online deadline for 2025/26 returns and payment is 11:59pm on 31 January 2027.
- Individual landlords cannot deduct residential mortgage interest; they get a basic rate tax reduction of 20% instead.
- Capital Gains Tax on the sale of a UK residential property must be reported and paid within 60 days of completion, and the sale also goes on the tax return.
- Making Tax Digital for Income Tax has applied since 6 April 2026 to landlords and sole traders with qualifying income over £50,000, and from 6 April 2027 it applies to those over £30,000.
You need to file a Self Assessment tax return for 2025/26 if your rental income was more than £2,500 after allowable expenses, or more than £10,000 before expenses. The online deadline is 11:59pm on 31 January 2027, and the tax is due the same day. If your rental income was more than £1,000 but no more than £2,500, you contact HMRC instead, and the first £1,000 of property income is tax-free under the property allowance.
This guide covers the 2025/26 tax year (6 April 2025 to 5 April 2026) for individual landlords who own UK property personally. Rental income from a property owned by a company is taxed as company income instead.
Do you need to file a tax return as a landlord?
| Your UK rental income in 2025/26 | What GOV.UK says to do |
|---|---|
| £1,000 or less (gross) | Nothing to tell HMRC: the property allowance covers it, unless you cannot use the allowance |
| More than £1,000, up to £2,500 | Contact HMRC |
| More than £2,500 after allowable expenses, or more than £10,000 before expenses | Report it on a Self Assessment tax return |
If you already file a return, or HMRC has asked you to, the rental profit goes on that return whatever the amount. If you have not sent a return before, or registered before but did not need to send one for 2024/25, you had to tell HMRC by 5 October 2026 by registering for Self Assessment. Check the thresholds against your own figures on GOV.UK's paying tax on rental income page, and see do I need to complete a tax return for other reasons to file.
The £1,000 property allowance can also be used instead of your actual expenses when your income is higher. If you claim it you cannot deduct expenses, and you cannot use it in a year you claim the tax reduction for residential mortgage interest (GOV.UK).
The UK property pages (SA105)
Rental income from UK property goes on the UK property supplementary pages, SA105, which sit alongside the main SA100 return. If you file online, you add the property section to your return. The pages are also used for premiums from leases of UK land and reverse premiums. Income from overseas property does not go on SA105 (GOV.UK SA105).
If you let more than one UK property, all the rents and expenses are added together as a single property business, so a loss on one property is set against profits on another. Overseas properties are kept separate from UK ones. Cash basis is the default way to work out property profits; if you prefer traditional accounting you tick the box on the return to opt out (GOV.UK rental income guidance).
Allowable expenses for landlords
You can deduct costs that are wholly and exclusively for renting out the property. GOV.UK lists, among others:
- general maintenance and repairs (not improvements)
- water rates, Council Tax, gas and electricity, if you pay them
- landlord insurance for buildings, contents and public liability
- letting agent and management fees
- legal fees for lets of a year or less, or for renewing a lease for less than 50 years
- accountants' fees
- ground rent and service charges
- services such as cleaning and gardening
- phone calls, stationery and advertising for new tenants
- the business proportion of vehicle running costs
You cannot deduct capital spending such as an extension or an upgraded kitchen, though you should keep those records for Capital Gains Tax when you sell. You cannot deduct the whole mortgage payment either. Replacing domestic items such as beds, sofas, carpets and fridges can qualify for replacement of domestic items relief, but not the first purchase of those items. If expenses exceed rent, the loss is normally carried forward against future profits of the same property business.
Mortgage interest: the finance cost restriction
Individual landlords of residential property cannot deduct mortgage interest from rental income. Since 6 April 2020, relief for residential finance costs has been restricted to the basic rate of Income Tax, given as a tax reduction worth 20% of the lowest of:
- your finance costs for the year, plus any unused finance costs brought forward
- your property business profits for the year
- your adjusted total income above your personal allowance, excluding savings and dividend income
The reduction cannot create a tax refund, and any unused finance costs are carried forward. Restricted finance costs include interest on mortgages, loans (including loans to buy furnishings) and overdrafts, plus fees for getting or repaying them. Companies are not affected (GOV.UK worked examples).
As an illustration, a landlord with £6,000 of residential mortgage interest, and profits and income above that figure, gets a tax reduction of £1,200 (20% of £6,000). Because the relief is fixed at the basic rate, higher and additional rate taxpayers get less relief than the tax they pay on that slice of profit.
Jointly owned property
Each owner reports their own share of the rental profit on their own return, and each can claim a £1,000 property allowance against their share of gross rent. Married couples and civil partners who live together are usually taxed on equal shares. If you own the property in unequal shares and are entitled to the income in the same unequal shares, you can be taxed on that basis by sending HMRC Form 17 with evidence of the unequal ownership, such as a declaration or deed (GOV.UK Form 17). Other joint owners are usually taxed on their share of ownership, unless they agree a different split.
The Rent a Room Scheme
If you let furnished accommodation in your only or main home, such as a room to a lodger, the Rent a Room Scheme lets you earn up to £7,500 a year tax-free. The limit halves to £3,750 if someone else also receives income from letting in the same property (GOV.UK).
- Receipts under the limit: the exemption is automatic and you do not need to do anything.
- Receipts over the limit: you must complete a tax return. You can then either pay tax on your receipts above £7,500 with no expenses deducted, or record income and expenses on the property pages in the normal way.
- Changing method: you must tell HMRC within one year of 31 January after the end of the tax year, so by 31 January 2028 for 2025/26 (HS223).
The scheme cannot be used for a home converted into separate flats, and you cannot claim the £1,000 property allowance on Rent a Room income.
Furnished holiday lettings rules ended in April 2025
The furnished holiday lettings regime was abolished from 6 April 2025 for Income Tax and Capital Gains Tax (1 April 2025 for Corporation Tax). On a 2025/26 return, a former holiday let is simply part of your property business, with no separate profit calculation. Returns up to and including 2024/25 could still use the old reliefs. Capital expenditure added to a capital allowance pool by 5 April 2025 can still be claimed until the pool is used up or you make a small pool claim (GOV.UK).
Selling a rental property
You may have to pay Capital Gains Tax when you sell a buy-to-let. If you are UK resident and have tax to pay on the sale of UK residential property, you must report and pay it within 60 days of completion using a Capital Gains Tax on UK property account, or you may be charged interest and a penalty (GOV.UK). If your total gains are below the tax-free allowance, £3,000 for 2025/26, you do not need to report online.
The 60-day return does not replace your tax return. If you are registered for Self Assessment, you must also include the sale on your 2025/26 return, on the capital gains pages. For 2025/26 the rates for individuals were 18% and 24%, depending on your taxable income (GOV.UK rates and allowances).
Making Tax Digital for Income Tax
Since 6 April 2026, landlords and sole traders whose qualifying income was over £50,000 in 2024/25 must use Making Tax Digital for Income Tax: digital records, quarterly updates through compatible software, and a tax return through that software. Qualifying income is your total self-employment and property income before expenses, and for a jointly owned property your share counts (GOV.UK qualifying income).
You still file your 2025/26 return in the usual way. That return also decides whether you join next: HMRC's thresholds are (GOV.UK):
| Qualifying income over | In tax year | Use Making Tax Digital from |
|---|---|---|
| £50,000 | 2024/25 | 6 April 2026 |
| £30,000 | 2025/26 | 6 April 2027 |
| £20,000 | 2026/27 | 6 April 2028 |
If you are already in, quarterly updates are due by 7 August, 7 November, 7 February and 7 May. HMRC will not give penalty points for late quarterly updates in 2026/27, although late tax returns still get them (GOV.UK quarterly updates). From September 2026 HMRC has started signing up people it expects to need the service for 2026/27.
Key dates for landlords
| Date | What is due |
|---|---|
| 5 October 2026 | Register for Self Assessment if you need to file for 2025/26 for the first time |
| 31 October 2026 | Paper tax return for 2025/26 |
| 30 December 2026 | Online return, if you owe less than £3,000 and want it collected through your PAYE tax code |
| 31 January 2027 | Online return for 2025/26, the tax owed and any first payment on account for 2026/27 |
| 7 February 2027 | Making Tax Digital quarterly update (6 April to 5 January), if you are signed up |
| 31 July 2027 | Second payment on account for 2026/27 |
| Within 60 days of completion | Capital Gains Tax return and payment on a UK residential property sale |
A late return costs an initial £100, then £10 a day after 3 months up to £900, and more at 6 and 12 months (GOV.UK penalties). If your bill is £1,000 or more and less than 80% of your tax was paid at source, you also make payments on account. See when is the next Self Assessment deadline for the full calendar.
How GoForma helps landlords
GoForma's ACCA and AAT qualified accountants have filed more than 7,000 tax returns. We prepare and file one-off Self Assessment returns for £198 plus VAT, with HMRC enquiry support included, and we are rated 4.9 on Google from 72 reviews. See our property accountants, our Self Assessment tax return service, or book a free consultation.
