The biggest tax change facing landlords right now

2027 Property Income Tax Impact Calculator

From 6 April 2027, rental profits move onto their own separate, higher tax rates: 22%, 42% and 47%, instead of the standard 20%/40%/45%. The Personal Allowance will also be set against employment and pension income first. Enter your numbers to see exactly how much more you'll pay, in pounds and pence, per year and per month.

Your extra tax from April 2027

-£1,334

extra per year, on the figures you've entered

-£111

extra per month

Full breakdown: 2026/27 vs 2027/28

2026/27 (current rules)

Taxable rental profit£12,600
Income tax (20%/40%/45% bands)£3,986
Section 24 credit (20%)− £1,200
Net tax on rental income£2,786

2027/28 (new rules)

Taxable rental profit£12,600
Income tax (22%/42%/47% property bands)£2,772
Section 24 credit (22%)− £1,320
Net tax on rental income£1,452

How your Personal Allowance is split from April 2027

Full allowance£12,570
Used against other income first£12,570
Left for rental profit£0

Because your other income uses up £12,570 of your allowance first, only £0 is left to set against your rental profit from April 2027 - this is part of why your bill increases.

Ways landlords are planning to reduce the impact

  • ✓ Increase pension contributions: extending your basic-rate band can keep more of your rental profit out of the higher property rate, and may restore Personal Allowance lost to the taper.
  • ✓ Review your ownership structure: the gap between personal and limited company taxation widens further once the new property rates apply. Use the Ltd Company vs Personal Calculator to compare your specific numbers.
  • ✓ Time disposals and improvements carefully: bringing forward planned capital works or disposals ahead of April 2027 may reduce the profit taxed at the new, higher rates in that year.
  • ✓ Consider jointly-owned property allocation: if you own with a spouse or civil partner, splitting rental income in line with ownership shares (or transferring shares via a Form 17 election) can spread profit across two sets of allowances and bands.
  • ✓ Get a proper review from a property tax specialist: the rules around the Personal Allowance ordering change are new and easy to miscalculate. A specialist can model your exact position and flag options this calculator can't cover.
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Frequently asked questions

From 6 April 2027, rental profits move onto their own separate income tax rates: 22% basic, 42% higher and 47% additional rate, instead of the standard 20%/40%/45% that currently applies. At the same time, the Section 24 mortgage interest credit rises from 20% to 22% to match the new basic property rate, and the Personal Allowance is applied to employment, pension and trading income before property income, which can mean less (or none) of your allowance is left to set against your rental profit.

Related calculators

Rental Income Tax Calculator Section 24 Tax Calculator Ltd Company vs Personal Buy-to-Let Cashflow Calculator