Property Income Tax 2027 Calculator

What changes on 6 April 2027

• Salary and pensions stay put. They are still taxed at 20%, 40% and 45%. Those 2027 to 2028 rates are announced policy, not yet law: the next Finance Act sets them.

• Allowance and bands stay frozen. The personal allowance is £12,570 and the basic rate band £37,700 in both years.

• Rent sits on top. Your allowance comes off your other income first, and rental profit is taxed above it in the bands, so more of it can reach the higher rate.

• The credit rises too. The finance cost credit goes from 20% to 24%. It is still a credit, not a deduction: how Section 24 works.

For the wider picture, read our guide to landlord tax changes in 2027.

Who it applies to

England and Northern Ireland. The Budget on 28 October 2026 announced the new rates for taxpayers here, and the next Finance Act will set them. What counts is where you live for tax, not where the property is.

Scotland and Wales. From 2027 to 2028 the Scottish Parliament and the Senedd can set their own property income rates, a power in force since 16 September 2026. Neither has set them yet. The Welsh draft budget is due on 17 November 2026 and the Scottish draft budget on 3 December 2026, so this calculator does not cover Scottish or Welsh taxpayers.

Companies and overseas lets. Companies pay corporation tax on rental profit, so these rates do not apply to them. The new rates also cover overseas lettings, but this calculator works out one UK residential letting business: enter your own share of it.

How the calculation works

1. Rental profit is your rent minus allowable expenses. Mortgage interest is not taken off.
2. Your personal allowance is £12,570. It goes down by £1 for every £2 of income over £100,000.
3. In 2027 to 2028 the allowance comes off your other income first, and your rental profit is stacked on top of your other income in the bands. In 2026 to 2027 the order makes no difference, because rent and salary pay the same rates.
4. Rental profit is taxed at the property rates, and your other income at the main rates.
5. The finance cost credit is 20% in 2026 to 2027 and 24% in 2027 to 2028, of the lowest of your finance costs, your rental profit and your income above the personal allowance. It cannot create a refund.
6. Tax because of your rentals is your total income tax minus the tax on your other income alone.

Not included: savings and dividends, losses and unused finance costs brought forward, furnished holiday lettings history, Gift Aid and pension contributions, the £1,000 property allowance, Scottish and Welsh taxpayers, companies and National Insurance.

Worked example

Salary £40,000, rent £18,000, expenses £3,000 and mortgage interest £8,000. Rental profit is £15,000, and the personal allowance of £12,570 comes off the salary.

That is £280 more a year, about £23.33 a month.

Sources

Every rate, band and date on this page was checked against these sources on 28 October 2026. We will check every figure again when Finance Bill 2026-27 is published.

• HM Treasury: Budget 2026, changes to tax on property income: The property basic, higher and additional rates for 2027 to 2028, to be legislated in Finance Bill 2026-27.
• HM Treasury: Budget 2026 policy costings: Finance cost relief stays aligned to the property basic rate.
• Finance Act 2026, section 7: Creates the separate property rates from 2027 to 2028, at the levels set before Budget 2026 announced a rise.
• Finance Act 2026, section 6: From 2027 to 2028, allowances come off other income first and property income sits above other income in the bands.
• Finance Act 2026, Schedule 1: The finance cost reduction moves to the property basic rate from 2027 to 2028 (paragraph 40).
• Income Tax (Trading and Other Income) Act 2005, section 274AA: How the finance cost reduction is capped, and its rate in each year.
• Finance Act 2026, section 2: The main basic, higher and additional rates for 2026 to 2027.
• Finance Act 2021, section 5 (as amended): The personal allowance and basic rate limit, frozen for both years.
• Income Tax Act 2007, section 35: The personal allowance and its taper above the income limit.
• Income Tax Act 2007, section 10: The higher rate limit, where the additional rate starts.
• Income Tax (Trading and Other Income) Act 2005, section 783BD: The property allowance is £1,000 a year.
• Income Tax (Trading and Other Income) Act 2005, section 783BL: The property allowance cannot be used in a year the finance cost reduction is claimed.
• HM Treasury: changes to tax rates for property, savings and dividend income: No change to the rates on employment and self-employment income; finance cost relief at the property basic rate.
• HMRC technical note: change to tax rates for property, savings and dividend income: The new order of taxation and the band widths, with worked examples.
• GOV.UK: Income Tax rates and Personal Allowances: The rates and bands for 2026 to 2027, and the personal allowance taper.
• The Finance Act 2026 (Scottish and Welsh Property Income Rates) Regulations 2026: Scotland and Wales can set their own property income rates from 2027 to 2028.
• GOV.UK: Income Tax in Scotland: Scottish taxpayers pay Scottish rates on rental profit in 2026 to 2027.
• GOV.UK: Income Tax in Wales: Welsh taxpayers pay the same rates as England in 2026 to 2027.
• HM Treasury: Chancellor's letter to the Treasury Committee on the Budget date: The Autumn Budget was on 28 October 2026.
• Senedd: Welsh Government draft budget for 2027 to 2028: The Welsh draft budget is planned for 17 November 2026.
• Scottish Government: letter on the draft Scottish Budget timetable, 1 September 2026: The Scottish draft budget is on 3 December 2026.