How much tax do I pay on £15,000 of rental profit in 2026/27?

Full answer

Rental profit is your rental income minus allowable expenses such as letting agent fees, insurance, repairs, ground rent and certain other running costs. For 2026/27 that profit is added to your other income and taxed at your marginal Income Tax rate. If your total income including the £15,000 profit stays within the basic-rate band, which runs up to £50,270, you pay 20%, giving £3,000 of tax. If the profit pushes you into the higher-rate band, the part above £50,270 is taxed at 40%, so a higher-rate landlord pays up to £6,000 on the £15,000. If you have no other income and the £15,000 is within your £12,570 Personal Allowance plus basic-rate band, only the amount above £12,570 is taxable. A key point for landlords is that mortgage interest is no longer deducted as an expense; instead you get a 20% tax credit on the interest, which means higher-rate landlords pay more tax than under the old rules. There is also a £1,000 property allowance: if your rental income is £1,000 or less it is tax-free, and you can deduct the £1,000 instead of actual expenses if that is more beneficial. Rental profit is reported through Self Assessment, with tax due by 31 January after the tax year. National Insurance does not usually apply to ordinary rental income. Use the Rental Income Tax calculator to combine your salary and rental profit and see the tax due.

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More answers

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