Indietax

Property Allowance Calculator 2026/27

Updated for the 2026/27tax year · Last updated

country: "UK" applicableCountries: ["UK"]

If you receive rental income from a property, a lodger, or a short-term let, the £1,000 property allowance could mean you owe nothing and don't need to file a tax return. This calculator shows whether your income falls within the exempt threshold, and — if not — whether claiming the allowance or your actual expenses produces a lower tax bill.

Enter your total gross rental receipts and your actual property expenses to see an instant side-by-side comparison. The result is your taxable property profit before income tax is applied.

Total rent received before any deductions — across all properties

Letting agent fees, repairs, insurance, council tax, mortgage interest

Enter your gross rental income above.

People also looked at

How this calculator works

The property allowance mirrors the logic of the trading allowance, but applies specifically to income from UK land and property — rent, holiday lets, Airbnb, room letting, and similar receipts.

Below £1,000: Gross rental income of £1,000 or less is fully exempt. No tax, no National Insurance, no Self Assessment registration required.

Over £1,000 — two methods:

  • Property allowance method: Deduct a flat £1,000 from gross income. No receipts or records required for the deduction itself (though you'll still need records to prove your gross income figure). Taxable profit = gross income − £1,000.
  • Actual expenses method: Deduct all your genuine allowable property expenses. This requires proper records but can produce a much lower taxable profit — or a loss — when costs are high relative to income.

Mortgage interest note: Since April 2020, residential landlords cannot deduct mortgage interest as an expense. Instead, basic rate (20%) tax relief is given as a credit against the final tax bill. The calculator treats mortgage interest as an allowable expense for the purposes of comparing methods, but the actual tax relief mechanism differs — consult an accountant if mortgage interest is a significant part of your costs.

Choosing each year: You can switch between the allowance method and actual expenses from one tax year to the next. There is no irrevocable election. This means if your expenses drop in a particular year (e.g., no repairs), you can revert to the allowance.

What this calculator does not include: Income tax on the resulting profit. Once you know your taxable property profit, use the Income Tax Calculator to see the tax due, remembering that property income stacks on top of other income when determining which band applies.

Frequently asked questions

The property allowance exempts the first £1,000 of gross property income from tax each year. If your total gross receipts from all UK property — rent, lodger income, Airbnb, or any other property letting — are £1,000 or less, you have no tax to pay and no need to file a Self Assessment return. Above £1,000 you must register and choose between deducting the allowance or your actual expenses.
The two schemes are separate and you cannot use both for the same property in the same year. Rent a Room lets you earn up to £7,500 tax-free from letting a furnished room in your own home — a much higher threshold. The property allowance (£1,000) applies to other rental income, or to Rent a Room income above £7,500 if you've opted into that scheme. If you have a lodger, the Rent a Room scheme will almost always be more beneficial.
Yes, provided the income is from property letting rather than providing services. Short-term lets through Airbnb, Vrbo, or similar platforms count as property income for the purposes of the allowance. If you're renting out a room in your own home and the income is under £7,500, Rent a Room will likely be more beneficial — but if you're renting a separate property or holiday let, the property allowance applies.
Yes, but it's one £1,000 allowance across all your UK property income combined — not £1,000 per property. So if you receive £600 in rent from one property and £600 from another, your total gross income is £1,200, which exceeds the threshold. You'd then choose between deducting the £1,000 allowance or your combined actual expenses across all properties.
Each co-owner gets their own £1,000 property allowance. For a property owned 50/50, each owner's share of the gross rental income is treated separately, and each person has their own £1,000 threshold to apply against their share. This means a jointly owned property generating £1,800 of gross rent could be fully covered by the allowances (£900 each, both under £1,000).
Yes. The property allowance and the trading allowance are completely independent. Each has its own £1,000 threshold. You can claim both in the same tax year, covering up to £2,000 of combined self-employment and property income tax-free — as long as each type stays within its own limit.
Allowable property expenses include: letting agent fees, property repairs and maintenance (not improvements), insurance premiums, council tax and utilities you pay as the landlord, mortgage interest (subject to the 20% restriction for residential property), accountancy fees, and advertising costs. You cannot deduct mortgage capital repayments, your own labour, or costs that are capital in nature (such as extensions or major renovations).
Unlike the trading allowance, you can make a property loss when claiming actual expenses. Property losses can be carried forward and offset against future property income — they generally cannot be offset against other income (like employment earnings). If you use the property allowance method instead, the minimum taxable profit is £0; the allowance cannot create a loss.

Related tools