Landlord Tax Rise 2027 Calculator — 2026/27 vs 2027/28 Tax on Your Rent
See the exact £ and per cent your rent's Income Tax rises from 6 April 2027, versus 2026/27 today — England, Wales & NI on the new 22/42/47% rates, Scotland unaffected.
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From 6 April 2027, rental profit stops sharing its tax rate with your salary. The Autumn Budget 2025 created a separate schedule of Income Tax rates just for property income — 20%/40%/45% today becomes 22%/42%/47% — and the Section 24 mortgage-interest credit rises from 20% to 22% at the same time. Nothing changes for 2026/27: this calculator shows both years side by side on your own numbers, so you can see the actual £ and per cent difference rather than just the headline rate change.
How the tax on your rent is worked out
Rental profit is stacked on top of your other taxable income and taxed at whatever band it reaches — it has no rate of its own until 2027. The calculator works out your total Income Tax with the rental profit included and without it; the difference is “tax on the rent,” done once on 2026/27 rates and once on the announced 2027/28 rates, using the same salary, rental profit and mortgage interest both times. Mortgage interest is never deducted from profit — since 2020 it earns a tax credit instead, capped at the lowest of the finance costs, the rental profit, and adjusted total income (Income Tax (Trading and Other Income) Act 2005 s.274A). That credit is worth 20% of the interest in 2026/27 and 22% from 2027/28 — itself part of the rise, because it doesn’t grow as fast as the tax it’s meant to offset.
Worked example
Salary £40,000, rental profit £12,000 before finance costs, mortgage interest £6,000, England:
- 2026/27: tax on the rent is £1,546 — an effective 13% of the £12,000 profit, after the 20% credit on the £6,000 of interest.
- 2027/28 on the same figures: £1,666 — effective 14%. The rise is £120 a year (8%), even though nothing about the letting changed.
- At this landlord’s 42% 2027/28 marginal rate, roughly £207 a year of extra rent (before tax) would cover the £120 rise — the calculator does this division for your own numbers.
Scotland and Wales are treated differently
The new property rates “will apply to England, Wales and Northern Ireland,” in gov.uk’s own words — Wales is inside the rise by default, because unlike Scotland it has no existing power of its own over a separate property-income schedule. Scotland is excluded. Scottish property income keeps its own non-savings bands (19% to 48%, unchanged for 2027/28 as things stand) and its Section 24 credit stays at 20%. Gov.uk adds that the government “will engage with the devolved governments of Scotland and Wales to provide them with the ability to set property income rates in line with their current Income Tax powers” — so this could still move for Scotland, and Wales could in time diverge from the rUK rate too; the calculator flags this as announced policy, not a locked-in law for every future year.
Where this fits with the rest of the site
This tool isolates the 2027 change on top of your existing position. For the fuller 2026/27 picture — the £1,000 property allowance comparison, the MTD threshold check, the full Section 24 cap mechanics — use the rental income tax calculator. The Section 24 guide works through the credit and its caps in detail, landlord tax changes 2026/27 is the full dated timeline of everything the Budget did and didn’t do, and Autumn Budget 2026 tracks whether the November 2026 Budget moves any of these 2027 figures again. If incorporation looks like it might blunt the rise — a limited company still deducts mortgage interest in full, with no Section 24 credit needed — the limited company vs personal calculator runs both routes on 2026/27 and 2027/28 rates side by side.
gov.uk, “Income Tax: changes to tax rates for property, savings and dividend income” (technical note and policy paper), read verbatim 13 Sep 2026, for the rate figures, the 6 April 2027 date, the England/Wales/NI scope and the Section 24 relief-rate change. House of Commons Library briefing CBP-10450 (13 Sep 2026) as a cross-check. Section 24 mechanics: Income Tax (Trading and Other Income) Act 2005 s.274A. Scottish and rest-of-UK 2026/27 bands: site/taxdata.py, verified 29 Aug 2026. General information, not advice — the 2027/28 figures are announced policy and could still change before they take effect.
Asked constantly
Only from 6 April 2027 (the 2027/28 tax year). Nothing about property income tax changes for 2026/27 — you keep paying 20/40/45% (England, Wales & NI) or the Scottish bands, with the 20% Section 24 credit, exactly as before. The calculator's 2026/27 column shows that unchanged position.
No. Gov.uk's technical note is explicit that the new 22/42/47% rates "will apply to England, Wales and Northern Ireland." Scotland keeps its own non-savings Income Tax bands, which the government has not announced any change to for 2027/28 — pick "Scotland" above and the calculator shows no rise.
Yes. Wales is named alongside England and Northern Ireland in gov.uk's scope statement for the new rates, because Wales does not have its own separate power over a property-income schedule the way Scotland does. The government says it will engage with the Welsh government about giving it that power in future, but as announced, Welsh taxpayers pay the same new rates as English and Northern Irish ones from 2027/28.
Yes, for England, Wales & NI taxpayers: gov.uk confirms relief "will continue" but "at the property basic rate from 2027 to 2028" — 22% instead of 20%. Because the credit is capped at the lowest of your finance costs, your rental profit and your adjusted income, a 2-point rise in the credit rate rarely cancels out the 2-point rise in the tax rate itself, which is why the net effect is still an increase.
It divides the extra tax by (1 minus your 2027/28 marginal property tax rate), because any extra rent you charge to cover the rise is itself taxed at that rate. It is a rough gross-up, not a recommendation to raise rent — see the Renters' Rights Act rules on notice and frequency before increasing anyone's rent.
They are announced government policy from the Autumn Budget on 26 November 2025, published on gov.uk, not yet in force. They are due to take effect on 6 April 2027, which leaves time (including a further Autumn Budget in between) for the detail to change before then — this page will be updated if it does.
Doing this every quarter, not just once?
Keep the same figures all year instead of re-typing them: rent and expenses per property, the Section 24 finance costs and the MTD quarterly totals, in one workbook.
Landlord Tax Lab stays free. We also sell the Landlord Tax Pack: one Excel workbook for up to 10 properties that logs rent and expenses per property, maps every line to its SA105 box, keeps Section 24 finance costs out of the expense boxes, and rolls up the MTD quarterly totals. £19 once — no subscription.
Disclosure: we make and sell the Tax Pack — this is our own product, not a paid recommendation. It does not file anything with HMRC and it is not tax advice; filing goes through you, your accountant or software on HMRC’s compatible-software list.
Sources
The primary documents this page is built from. Links checked 5 September 2026.