Property income allowance calculator, 2026/27
If you earn a modest amount from letting property, you can choose between deducting your actual expenses or simply claiming the flat £1,000 property income allowance instead. This calculator compares both routes so you can see which gives the better result before you file.
The property income allowance calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. Uses the 2026/27 property income allowance of £1,000 from RATES_2026_27.personal.propertyAllowance, which can be deducted instead of actual expenses, but not on top of them. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under property & landlord. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Best option
Tax bill using actual expenses
Tax bill using the property income allowance
If income is below the allowance
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
What the property income allowance is for
The property income allowance lets someone with modest rental income, perhaps letting a single room, a driveway, or a small holiday let occasionally, avoid the administrative burden of tracking every expense receipt. Instead of deducting actual costs from rental income, you can deduct a flat £1,000 and pay tax only on the balance, or pay no tax and often have no reporting obligation at all if gross income is £1,000 or less.
It cannot be used alongside actual expenses on the same source of income; you choose one method or the other for the tax year, and it usually makes sense to work out both and pick whichever produces the lower tax bill, which is exactly what this calculator does.
How this is calculated
The calculator works out taxable profit two ways: gross rental income less actual expenses you enter, and gross rental income less the flat £1,000 allowance (with profit floored at zero rather than allowed to create a loss). Each profit figure is then taxed at the marginal rate you select, and the calculator recommends whichever method produces the lower tax bill.
If your actual allowable expenses are below £1,000, the allowance will almost always beat deducting actual costs, because you get to shelter more income from tax than your real costs justify. If your expenses are already above £1,000, deducting them properly, and keeping the receipts to prove it, is usually the better route.
Practical points and limits
The £1,000 allowance cannot be used to create a loss to carry forward against future rental profit, unlike deducting actual expenses, which can generate a loss where costs genuinely exceed income in a given year. If you have more than one UK property, the £1,000 allowance is a single limit across your whole property business, not a separate £1,000 for each individual property.
The allowance interacts with, but is separate from, the rent-a-room scheme, which has its own, larger £7,500 allowance for letting a room in your own home; you cannot claim both allowances on the same income, so check which scheme actually applies to your situation before choosing.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Can I claim the property income allowance and deduct expenses too?
No, not on the same source of income. You must choose either the flat £1,000 property income allowance or your actual allowable expenses for a given tax year; you cannot deduct both from the same rental income.
Do I need to tell HMRC if my rental income is under £1,000?
In most cases, no. If your gross property income for the year is £1,000 or less and you have no other reason to complete a tax return, you generally do not need to report it to HMRC, though keeping basic records is still sensible.
Does the £1,000 allowance apply per property or in total?
It applies in total across all of your UK property income, not per property. If you own several rental properties, you still only get one £1,000 allowance to set against your combined property income.
Is the property income allowance the same as the rent-a-room scheme?
No, they are separate reliefs. The property income allowance is £1,000 and covers general property letting, while rent-a-room relief is £7,500 and specifically covers letting a furnished room in your own main home; you cannot use both on the same income.
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