Glossary · UK
What is Buy-to-Let (BTL)?
Buying property to rent out — subject to extra stamp duty surcharge and income tax on rent.
Full Definition
Buy-to-Let (BTL) is the practice of buying residential property specifically to rent to tenants. UK BTL has become significantly less tax-efficient since 2016: (1) 5% additional SDLT surcharge in England (Oct 2024+), 8% ADS in Scotland (Dec 2024+); (2) Section 24 mortgage interest restriction — interest is no longer deductible from rental income, only a 20% tax credit applied; (3) higher CGT rates on residential property sales (18%/24%). Rental income is taxed as miscellaneous income. Most BTL mortgages require 25% deposit and a "rental cover" of 125–145% of mortgage interest at a stressed rate.
Related Calculators
Buy-to-Let Calculator
Analyse the profitability of a buy-to-let investment including tax and costs.
Rental Yield Calculator
Calculate gross and net rental yield for buy-to-let properties.
Stamp Duty Calculator
Calculate Stamp Duty Land Tax (SDLT) for your property purchase in England.
Capital Gains Tax Calculator
Calculate Capital Gains Tax on property, shares and other assets for 2025/26.
Read More
See Also
Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.