Question 1

How much tax do I pay on rental income?

Accepted Answer

You pay Income Tax on your net rental profit (rent minus allowable expenses) at your marginal rate — 20%, 40% or 45%. Most individual landlords also lose mortgage interest as a deductible expense under Section 24, instead receiving a 20% basic-rate tax credit. Use our Landlord Tax Band Calculator for an exact figure.

Question 2

What is Section 24 and how does it affect me?

Accepted Answer

Section 24 (the 'tenant tax') restricts mortgage interest relief for individual buy-to-let landlords. Instead of deducting mortgage interest from rental income, you receive a basic-rate (20%) tax credit. This pushes some landlords into a higher tax band on paper. Limited companies are not affected. See our Section 24 Calculator.

Question 3

Should I put my rental property in a limited company?

Accepted Answer

It depends on income, mortgage levels, and goals. Limited companies escape Section 24 and pay Corporation Tax (19–25%) but face higher mortgage rates, double tax on extraction, and SDLT/CGT on transfer. Use the Incorporation Calculator to model both routes.

Question 4

When does MTD start for landlords?

Accepted Answer

Making Tax Digital for Income Tax begins 6 April 2026 for landlords and self-employed people with gross income above £50,000. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. You'll need to keep digital records and submit quarterly updates.

Question 5

Can I claim mortgage interest as an expense?

Accepted Answer

Not as a deductible expense if you own personally — Section 24 restricts this to a 20% tax credit. Limited companies can still deduct mortgage interest in full from rental profits before Corporation Tax.

Question 6

What is the 60-day CGT reporting rule?

Accepted Answer

When you sell a UK residential property at a gain, you must report and pay Capital Gains Tax within 60 days of completion using HMRC's online CGT service. This applies even if you also report it on your Self Assessment return.

Question 7

How much deposit do I need for a buy-to-let?

Accepted Answer

Most BTL lenders require 20–25% deposit minimum, with the best rates at 35–40%. Affordability is stress-tested using Interest Cover Ratio (ICR) — typically 125% for basic-rate, 145% for higher-rate taxpayers, calculated at a stressed rate (often 5.5–8.5%).

Question 8

What is ICR (Interest Cover Ratio)?

Accepted Answer

ICR is the ratio of rental income to mortgage interest at a stressed rate. Lenders use it to test affordability. A 125% ICR means rent must cover 125% of the stressed interest payment. Use our Mortgage Affordability Calculator to check.

Question 9

Do I need to register as a landlord?

Accepted Answer

It depends where the property is. Scotland and Wales operate national landlord registers (Landlord Registration Scotland, Rent Smart Wales) that are mandatory. England has no national register but many councils run selective licensing schemes. Check your local council before letting.

Question 10

What insurance do I need as a landlord?

Accepted Answer

At minimum, specialist landlord buildings insurance (standard home insurance won't cover let property). Most landlords also add property owner's liability, loss of rent, and contents cover for furnished lets. Rent guarantee and legal expenses are optional but popular.

Question 11

How often do I need a gas safety certificate?

Accepted Answer

Annually. A Gas Safe registered engineer must inspect every gas appliance, flue and pipework in the property each year and issue a CP12 (Gas Safety Record). You must give the tenant a copy within 28 days, and to new tenants before they move in.

Question 12

What happens if I don't protect the deposit?

Accepted Answer

Failure to protect a deposit in an approved scheme (DPS, MyDeposits or TDS) within 30 days, or to serve the prescribed information, exposes you to a court penalty of 1–3x the deposit and blocks any Section 21 notice until the deposit is returned.

Question 13

How much does an EPC upgrade cost?

Accepted Answer

Typically £1,500–£15,000 depending on the property. The current minimum is EPC E. Proposed regulations require all new tenancies to meet EPC C from 2028, and all existing tenancies by 2030. Use our EPC Calculator to model upgrade routes.

Question 14

Do I need an HMO licence?

Accepted Answer

Mandatory HMO licensing applies to properties let to 5+ unrelated occupants forming 2+ households. Many councils also operate additional or selective licensing covering smaller HMOs or whole boroughs. Use our HMO Licensing Checker to find out.

Question 15

Can I rent out my property on Airbnb?

Accepted Answer

Yes, but check your mortgage (most BTL lenders require permission), leasehold restrictions, and local rules. London has a 90-night limit per calendar year without planning permission. Some councils (e.g. Edinburgh) require short-term let licences.

Question 16

What changed with holiday lets in April 2025?

Accepted Answer

The Furnished Holiday Let (FHL) tax regime was abolished from 6 April 2025. FHLs are now taxed like standard rental property — you lose mortgage interest relief, capital allowances on furniture, and CGT reliefs (BADR, rollover). Pension contributions can no longer use FHL income as 'relevant earnings'.

Question 17

How do I evict a tenant under the new rules?

Accepted Answer

Once the Renters' Rights Act commences (expected 1 May 2026), Section 21 'no-fault' evictions end. All tenancies become periodic assured tenancies. Possession requires a Section 8 notice on a specific statutory ground — anti-social behaviour, rent arrears (now 3 months), sale, or moving in.

Question 18

What happens when Section 21 is abolished?

Accepted Answer

Section 21 abolition under the Renters' Rights Act ends no-fault evictions in England. Landlords must use Section 8 grounds. New grounds (1A — selling, 1B — moving in) carry 4-month notice and a 12-month protected period at the start of the tenancy.

Landlord FAQ

Tax & Accounting

Buying & Financing

Lettings & Tenancies

Compliance & Safety

HMOs & Licensing

Holiday Lets & Short-Term

Disputes & Evictions

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