Property tax calculator, 2026/27

Property tax is not a single number

Anyone weighing up a UK property investment needs to think about tax at three distinct points, not just one. Stamp duty land tax (or LBTT in Scotland, LTT in Wales) is charged upfront on purchase and is usually the largest single tax event in cash terms. Income tax then applies every year on rental profit for as long as you hold the property. Finally, capital gains tax applies on sale, based on how much the property has grown in value while you owned it.

Because these three taxes are assessed completely separately, under different rules and at different rates, it is easy to focus on just one (often the purchase-time SDLT bill) and lose sight of the cumulative tax cost over a typical multi-year hold. This calculator is designed to put all three side by side.

How this is calculated

SDLT is calculated progressively through the residential bands (0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1,500,000, 12% above £1,500,000), with a flat 5% additional dwelling surcharge added on the whole price where the purchase is a second home, buy-to-let or company acquisition. Rental profit is taxed using the standard income tax bands and personal allowance for the year, treating the profit entered as the total taxable income for that calculation.

Capital gains tax applies the residential rates of 18% and 24% to the gain after deducting the £3,000 annual exempt amount, splitting the chargeable gain between the basic rate band (to the extent it is still available after accounting for the rental profit entered) and the higher rate above that.

What is not included and why it matters

This calculator does not model mortgage interest relief restrictions, letting agent or maintenance costs, void periods, ATED for corporate owners, or Private Residence Relief if the property was ever your main home; each of these can materially change the real tax outcome for a specific property and owner.

It also treats each tax year and the eventual sale as isolated events using only the figures you enter, rather than modelling multiple years of rent, indexation of the purchase price, or changes in your other income and tax band over time, so treat the total as an illustrative order-of-magnitude figure rather than a forecast.

Which tax is usually the biggest cost when buying a second property?

For most buy-to-let and second-home purchases, stamp duty land tax including the 5% additional dwelling surcharge is the single largest upfront tax cost, often exceeding the first year or two of rental profit tax combined, which is why it needs factoring into the initial cash required.

Do I pay income tax on rental profit every year I own the property?

Yes. Rental profit (rent less allowable expenses) is taxed as part of your income tax return every tax year you receive it, regardless of whether you plan to sell the property eventually, so it is an ongoing cost rather than a one-off.

Is capital gains tax only due if I sell for more than I paid?

Broadly yes, capital gains tax is charged on the increase in value between purchase and sale, after allowable costs such as stamp duty, legal fees and qualifying improvements, and after your annual exempt amount, so a property sold at a loss generally creates no CGT liability.

Does owning the property through a limited company change all three taxes?

Yes, significantly. A company pays SDLT the same way (often with the surcharge applying regardless of other properties owned personally), but pays corporation tax rather than income tax on rental profit, and corporation tax rather than personal CGT on a sale, each with different rates and reliefs.