Property tax advice for landlords.

Rental profit is added to your other income and taxed at your usual rates. Profit is rent less allowable expenses: repairs, letting and management fees, insurance, ground rent and service charges, accountancy fees, and any utilities or council tax you pay. Replacing furniture or appliances in a furnished let is also allowable. Improvements and the capital part of mortgage repayments are not. With small rental income, the £1,000 property allowance may be simpler, but you then cannot claim expenses.

Mortgage interest works differently. Individual residential landlords receive a tax credit at the basic rate instead of a deduction: 20% for 2026/27, rising to 22% from April 2027. A higher rate taxpayer gets relief at 20% while the rent is taxed at 40%. Unused credit carries forward but cannot create a refund. From 6 April 2027, property income has its own rates in England and Northern Ireland: 22% basic, 42% higher and 47% additional. The Senedd and the Scottish Parliament can now set their own property rates for Welsh and Scottish taxpayers. The mortgage interest credit rises to 22% at the same time.

Making Tax Digital for Income Tax applies from 6 April 2026 if your property and self-employment turnover was over £50,000 in 2024/25, falling to £30,000 of 2025/26 income from April 2027 and £20,000 of 2026/27 income from April 2028. For joint property, only your share counts.

Capital gains tax on property is charged on the gain: the sale price less the purchase price and allowable costs such as stamp duty, legal and agent fees, and capital improvements. For 2026/27 the first £3,000 of gains is covered by the annual exempt amount.

The rest is taxed at 18% within your unused basic rate band and 24% above it. Because the gain sits on top of your income, a large sale often falls mostly at 24%.

The deadline is the part people miss. If you sell UK residential property and owe tax, you must report and pay within 60 days of completion, separately from your Self Assessment return. Late reporting brings penalties and interest.

Private residence relief removes the gain for the period a property was your main home. If the property was your main home at some point, the last 9 months of ownership always qualify, even after you have moved out. If you lived there and then let it, the gain is split between exempt and taxable periods.

Lettings relief is now narrow. It only applies where you lived in the property at the same time as your tenants, for example letting a room. It is capped at the lowest of the private residence relief due, the gain on the let part, and £40,000. If you own two homes, only one can be your main residence at any time.

In England and Northern Ireland, buying a residential property that means you will own more than one usually triggers the higher rates of Stamp Duty Land Tax: a 5% surcharge on top of the standard rates. Married couples and civil partners are treated together.

If you buy a new main home before selling the old one, you may claim the surcharge back if you sell the previous home within 3 years and claim within 12 months of the sale. Buyers who are not UK resident may pay a further 2% surcharge. Scotland and Wales have their own taxes with different rates.

A declaration of trust is a signed document that records who owns a property beneficially, and in what shares. The names on the HM Land Registry title show the legal owners. They do not show how the value and the rent are shared between them.

Where a property is in joint names, HMRC starts from the presumption that you own it as joint tenants: equal rights to the whole property, with no separate shares. A declaration of trust in equal or unequal shares displaces that presumption. If you are joint tenants now, the joint tenancy is severed first and HM Land Registry adds a Form A restriction to the title, for which there is no Land Registry fee.

The declaration matters for tax in three ways:

• Married couples and civil partners: rent from jointly held property is taxed 50:50 by default. You can be taxed on other shares only if you really own the property in those shares, your share of the income matches your share of the property, and HMRC receives Form 17 within 60 days of the date of the declaration, with evidence such as the declaration of trust. Form 17 is not available to joint tenants, because joint tenants have no shares, and it applies only to income from its date.
• Unmarried co-owners: there is no 50:50 rule. HMRC taxes the person who receives or is entitled to the rent, so the declaration and the way the money actually flows should match.
• Selling or passing on the property: capital gains tax on a sale follows your beneficial shares, and as tenants in common each share can pass under your will instead of going automatically to the other owner.

Changing the shares has its own tax costs. A transfer to a spouse or civil partner you live with is treated as giving neither a gain nor a loss for capital gains tax, but stamp duty land tax can be due if the receiving owner takes on a larger share of a mortgage, and a gift between unmarried co-owners is treated as made at market value. We check these points, and the lender's position, before anyone signs. Our guide to jointly owned property includes a worked example.

If you live abroad and let UK property, the Non-Resident Landlord Scheme applies. Your letting agent, or your tenant if rent is over £100 a week, deducts basic rate tax unless HMRC has approved you to receive rent gross. Non-residents must also report every UK property disposal within 60 days, even where no tax is due.

Our 2026/27 Property Investor Guide is a free PDF you can download and keep, with the current rates and deadlines for landlords and second home owners in one place.

You can also run your own numbers with our property tax calculators, which cover stamp duty, capital gains tax, rental income tax and incorporation.

A guide explains the general rules. Applying them to your properties needs your own figures. If you are planning a sale, a purchase or a change of ownership, get in touch before you act.