The Complete Landlord Tax Guide 2026/27
Last updated 23 June 2026 · 20 min read · By the LandlordTaxAi Editorial Team
The short answer
A UK landlord can face five taxes: Income Tax on rental profit (with the Section 24 mortgage restriction), Stamp Duty when you buy, Capital Gains Tax when you sell, Inheritance Tax on your estate, and the new Making Tax Digital filing rules from April 2026. This guide explains every one for 2026/27, with the rates, the deadlines and links to our in-depth guides on each.
Most landlord tax articles cover one tax in isolation. The trouble is that they all interact — a repair you deduct now affects your Capital Gains Tax later, the structure you choose changes your Income Tax and your Inheritance Tax, and Making Tax Digital changes how you report all of it. This is the single page that joins everything up. Use it as your map, then follow the links into the detail. To put numbers behind any of it, try our calculators.
The five taxes at a glance
| Tax | Triggered by | 2026/27 headline |
|---|---|---|
| Income Tax | Annual rental profit | 20% / 40% / 45% |
| Stamp Duty | Buying a property | +5% surcharge |
| Capital Gains Tax | Selling a property | 18% / 24% |
| Inheritance Tax | Death / estate | 40% above bands |
| Making Tax Digital | How you report | From April 2026 |
1. Income Tax on your rental profit
Your taxable profit is your rent minus your allowable expenses, added on top of your other income and taxed at 20%, 40% or 45%. The catch is Section 24: mortgage interest is no longer a normal expense — instead you get a flat 20% tax credit, which hits higher-rate landlords hard. Read the Section 24 guide and see how much tax a landlord actually pays. Don’t forget payments on account, which make your first bill about 1.5×.
2. Expenses, repairs and reliefs
Claiming everything you are entitled to is the simplest way to cut your bill. Know the full list of allowable expenses, understand the difference between repairs and improvements (one is deductible now, the other reduces CGT later), and use replacement of domestic items relief for furniture and appliances. The cash basis is the default for most landlords from 2024/25.
3. Stamp Duty when you buy
Buying an additional property means a 5% surcharge on top of standard Stamp Duty in England and Northern Ireland (Scotland and Wales have their own versions). On a £300,000 buy-to-let that is around £20,000. In one specific case — replacing your main home — you can reclaim it. Read the Stamp Duty surcharge and refund guide.
4. Capital Gains Tax when you sell
Sell a property that is not your main home and you pay 18% / 24% on the gain above the £3,000 allowance, reported and paid within 60 days. Start with how to calculate CGT, then dig into the specifics — rental property, inherited property, second homes — and learn how to reduce the bill.
5. Inheritance Tax on your estate
A buy-to-let portfolio is fully exposed to 40% Inheritance Tax above your nil-rate bands, with no business relief. It is often a landlord’s single biggest future tax. Read the buy-to-let Inheritance Tax guide to understand the £325,000 and £175,000 bands and your options.
Free calculator · no sign-up
Rental profit & tax calculator
Estimate the tax on your rental income for 2026/27
Result
- Taxable profit (rent − expenses)
- £11,200
- Income Tax at 40%
- £4,480
- Less mortgage interest credit (20%)
- − £1,000
- Tax due on this property
- £3,480
- Income after tax
- £7,720
Estimate based on verified 2026/27 UK rates. Informational only — not personal tax advice.
One place for every landlord tax sum
Income tax, CGT, Stamp Duty refunds and Inheritance Tax — run the numbers with our free calculators.
Open the calculators6. Making Tax Digital — the 2026 change
From 6 April 2026, landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC. The threshold drops to £30,000 from April 2027 and a planned £20,000 from April 2028. Check whether you need to use MTD for your rental income, how to register, and the new penalty points for missing deadlines.
7. Personal or limited company?
The structure you choose shapes nearly every tax above. A company sidesteps Section 24 and pays Corporation Tax, but adds dividend tax and admin. Read the honest comparison in limited company vs personal buy-to-let and, if you already own property, the cost of moving it across in incorporation relief.
How to stay on top of it all
- 1
Work out your taxable rental profit
Add up your rent, subtract your allowable expenses, and remember mortgage interest is restricted to a 20% tax credit under Section 24 rather than a full deduction.
- 2
Separate repairs from improvements
Deduct repairs against rental income now; record improvements as capital to reduce Capital Gains Tax when you eventually sell.
- 3
Budget for the tax you'll owe — including payments on account
Set aside your Income Tax, and in your first year allow for roughly 1.5 times the bill because of payments on account due on 31 January.
- 4
Plan the one-off taxes
Factor in Stamp Duty (with the 5% surcharge) when you buy, Capital Gains Tax when you sell, and Inheritance Tax on your estate.
- 5
Get ready for Making Tax Digital
If your qualifying income is over £50,000 you must keep digital records and file quarterly from April 2026; £30,000 from April 2027.
- 6
Decide on the right structure
Weigh up holding property personally versus through a limited company, based on your tax band, gearing and whether you reinvest the profits.
Key dates for landlords
| 5 October | Register for Self Assessment if you started letting |
| 31 January | Online tax return + balancing payment + first payment on account |
| 31 July | Second payment on account |
| Within 60 days | Report and pay CGT after selling residential property |
Frequently asked questions
What taxes does a UK landlord pay?
A landlord can face five taxes: Income Tax on rental profit each year; Stamp Duty Land Tax (with the 5% additional-property surcharge) when buying; Capital Gains Tax at 18%/24% when selling; Inheritance Tax at 40% on the estate; and, from April 2026, the obligation to comply with Making Tax Digital for Income Tax. Not all apply at once — Income Tax is annual, while Stamp Duty, CGT and IHT are triggered by buying, selling and death respectively.
How is rental income taxed in 2026/27?
Your rental profit (rent minus allowable expenses) is added to your other income and taxed at your Income Tax rate — 20%, 40% or 45%. Mortgage interest is not a normal expense; instead you get a flat 20% tax credit on it under Section 24. There is also a £1,000 property allowance, so if your gross rental income is under £1,000 you usually do not need to declare it at all.
When does Making Tax Digital start for landlords?
Making Tax Digital for Income Tax is phased by qualifying income: from 6 April 2026 for landlords and sole traders with income over £50,000, from 6 April 2027 for those over £30,000, and a planned extension to £20,000 from April 2028. Affected landlords must keep digital records and send quarterly updates to HMRC using compatible software, in addition to a final declaration.
What is the biggest tax mistake landlords make?
The most common and costly mistakes are: not budgeting for payments on account and being shocked by a 1.5× first bill; confusing repairs (deductible now) with improvements (capital); forgetting that mortgage interest only gives a 20% credit; missing the 60-day Capital Gains Tax deadline when selling; and assuming a buy-to-let portfolio is sheltered from Inheritance Tax when it is not. Each is avoidable with planning.
Should I use an accountant or software?
Many landlords use compatible software to keep digital records and file under Making Tax Digital, and bring in an accountant for one-off events like incorporating, selling, or estate planning. The right mix depends on the size of your portfolio and how complex your affairs are. Whatever you choose, the records you keep through the year are what make every tax above easier to get right.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 23 June 2026 · Based on HMRC guidance on Income Tax for landlords, Section 24, Capital Gains Tax, Stamp Duty Land Tax, Inheritance Tax and Making Tax Digital for Income Tax. Figures are for the 2026/27 tax year. This article is informational only and does not constitute tax advice. Always check the latest details on GOV.UK or with a qualified accountant.