In the summer 2015 Budget, the Chancellor announced that finance costs including Mortgage Interest Relief for residential landlords would be restricted to the basic rate of income tax (20%). Read more...

In the 2020/21 tax year, landlords will no longer be able to deduct their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Under the old rules (2016/17 year and prior) the full amount of finance costs paid by Landlords was allowed as a deduction against rental income.

The new rules are being introduced gradually over a three year period which started on 6 April 2017, with the phase-in as follows:

  • In 2017/18, the deduction from property income was restricted to 75% of the finance costs incurred, with the remaining 25% being available as a basic rate reduction.
  • In 2018/19, 50% of the finance costs will be given as deduction and the remaining 50% will be given as a basic rate reduction.
  • In 2019/20, 25% of the finance costs will be given as deduction and the remaining 75% will be given as a basic rate reduction.
  • In 2020/21 and onwards, no finance costs will be given as deduction and the remaining 100% will be given as a basic rate reduction.

This calculator will help you to work out an approximate estimate of your tax liability under self assessment in the 2018/19 tax year, subject to the disclaimers below.

Input your salary from employment as per your 2018/19 P60.
Assumes no PAYE coding notice adjustment, no benefits, no employment non-reimbursed expenses and similar.
This is the income from rent (before deductions) in the 2018/19 tax year.
This does NOT include any cost associated with your mortgage or any other interest paid on loans on your property. This includes repairs, maintenance, agency fees etc in the 2018/19 tax year.
This includes Mortgage Interest you paid, plus any other cost in obtaining your mortgage and other finance / loans in renovating your property in the 2018/19 tax year.

The changes will have placed you into a higher tax bracket.

TOTAL TAX OWED (not including payments on account)
This is an approximate estimate of your tax liability under self assessment in the 2018/19 tax year, subject to the disclaimers below.

Disclaimer and calculator assumptions

Please note, this is a limited basic calculator, and is intended as an approximate guide. Every taxpayers' circumstances are different, and consequently, this may not be a true reflection of your actual tax position. There are a wide range of factors which may affect the result, for instance, if you have other taxable income, if you receive taxable benefits, if you contribute to an AVC pension, make gift aid donations or are in receipt of capital gains. This is just naming a few, and if you are in any doubt whatsoever, it is highly recommended to seek professional assistance from specialists property tax advisors such as RITA4Rent. Given the complexity regarding losses, this calculator is only for those who have made a profit under both the old and new rules. We accept no responsibility or liability to any party who seeks to rely on the results of this calculator.

Please note that any contract for the supply of goods/services will be made between you and the provider of the goods/services; not with the Residential Landlords Association Limited or any of its associated companies. The RLA has no liability in relation to any contract entered into by you as the RLA only acts as an introducer.

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