Answers · UK 2025/26
How does the UK Rent a Room scheme work?
The Rent a Room scheme lets you earn up to £7,500/year tax-free from renting furnished rooms in your only or main home (£3,750 if jointly let). Above £7,500 you choose between paying tax on the excess or treating the income as standard rental income.
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UK Rent a Room scheme 2025/26 lets owner-occupiers (and tenants with landlord permission) earn up to £7,500/year tax-free by letting furnished rooms in their main home. Threshold: £7,500/year per residence, halved to £3,750/year if you share the income with someone else (e.g. married couple). Above the threshold: two options. (1) Method A — pay tax on (gross rent − £7,500). (2) Method B — pay tax on (rent − allowable expenses) as standard rental income. Choose whichever gives lower tax. HMRC auto-applies method A unless you elect otherwise (within 1 year of 31 January after the tax year). Eligibility: must be a furnished room in your only or main home (not a separate flat, not unfurnished, not abroad); applies to lodgers (sharing your living space) and tenant-only letting. Doesn't apply if you rent out a whole home or use Airbnb as a business. Below £7,500: no need to declare or file. Above: must complete Self Assessment SA105 (UK property pages). Combines with the Marriage Allowance and other tax-free thresholds, making it one of the most generous UK reliefs.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.