Question 1

How do I work out the rental yield on a property?

Accepted Answer

Gross yield is the annual rent divided by the property price, expressed as a percentage. Net yield deducts running costs — letting fees, insurance, maintenance, void periods and mortgage interest — before dividing by the price or your total cash invested. The rental yield calculator works out both, helping you compare deals on a like-for-like basis rather than headline rent alone.

Question 2

What is Section 24 and how does it affect me?

Accepted Answer

Section 24 removed the ability to deduct mortgage interest from rental income for individual landlords. Instead you receive a flat 20% tax credit on the interest. This means higher and additional-rate landlords pay tax on a larger figure, and heavily mortgaged portfolios can show a paper profit while making little real cash. The Section 24 calculator shows your true post-restriction tax bill.

Question 3

How much stamp duty do landlords pay?

Accepted Answer

On an additional residential property you pay the standard SDLT rates plus a 3% surcharge on the whole price (with a higher rate for non-residents). In Scotland the equivalent is the LBTT Additional Dwelling Supplement, and in Wales it is higher-rate LTT. The stamp duty calculator includes the surcharge, so you can budget the full upfront cost before making an offer.

Question 4

What capital gains tax will I pay when I sell?

Accepted Answer

Residential property gains are taxed at 18% within the basic-rate band and 24% above it, after deducting the annual exempt amount of £3,000 and allowable costs such as buying, selling and improvement expenses. You must report and pay within 60 days of completion. The capital gains tax calculator estimates the bill so you can plan a disposal and avoid penalties.

Question 5

Should I hold property personally or in a limited company?

Accepted Answer

A company is not caught by Section 24, so mortgage interest remains fully deductible against corporation tax, which can suit higher-rate, heavily geared landlords. But companies face their own costs: extra admin, higher BTL mortgage rates, and tax on extracting profit as dividends. Model both with the income tax, corporation tax and dividend tax calculators before incorporating, and take advice.

Question 6

How does a buy-to-let mortgage differ from a residential one?

Accepted Answer

BTL lending is assessed mainly on expected rent rather than your salary, using an interest-coverage ratio and stress-tested rate, and usually requires a larger deposit — often 25% or more. Most BTL mortgages are interest-only. The mortgage and BTL affordability calculators help you see what you can borrow and what the monthly payments will be at different rates.

Question 7

Do I have to register for Making Tax Digital?

Accepted Answer

From April 2026, landlords with qualifying rental and self-employment income over £50,000 must keep digital records and send HMRC quarterly updates under MTD for Income Tax; the £30,000 threshold follows in 2027. It changes how you report, not how much you owe. Keeping clean digital records of rent and expenses now will make the transition far smoother.

Question 8

What expenses can I deduct from rental income?

Accepted Answer

Allowable revenue costs include letting-agent fees, landlord insurance, repairs and maintenance (not improvements), ground rent, service charges, accountancy and the replacement of domestic items in furnished lets. Mortgage interest is handled separately via the Section 24 credit. Claiming every allowable cost reduces your taxable profit, so keep thorough records and see our landlord tax guide.

Question 9

Should I overpay or remortgage my BTL loan?

Accepted Answer

It depends on your rate, fees and goals. Overpaying reduces interest and gearing but ties up cash; remortgaging onto a lower rate can cut monthly costs but carries fees and stress tests. The mortgage overpayment and remortgage calculators let you compare the two, while an offset mortgage can keep your money accessible while still cutting interest.

Question 10

Are furnished holiday lets taxed differently?

Accepted Answer

The favourable furnished holiday let regime — which allowed full mortgage-interest relief and certain capital gains advantages — has been abolished from April 2025, so most FHLs are now taxed like ordinary rental property under Section 24. Our furnished holiday let guide explains the transitional position. Review any FHL holdings carefully, as the tax treatment has materially changed.

Calculators for UK Landlords

Buying and yields

Mortgages and financing

Tax on income and gains

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