Glossary · UK
What is Property Income Allowance?
A £1,000 tax-free allowance against gross property income each tax year.
Full Definition
The Property Income Allowance lets an individual earn up to £1,000 of gross property income (for example, from letting a room or a driveway) each tax year completely free of Income Tax, without needing to declare it. Landlords with higher income can instead choose to deduct the £1,000 allowance in place of their actual allowable expenses if that gives a better result, though they cannot claim both the allowance and their real expenses for the same income. Where gross income is £1,000 or less, the property does not usually need to be reported to HMRC at all.
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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.