Renting out property in the UK: landlord guide

Costs of buying

• Stamp duty land tax (England and Northern Ireland) from 1 April 2025: 0% up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above.
• A buy-to-let or second home adds 5 percentage points to every band. Buyers who are not UK resident add another 2 points.
• Scotland and Wales have their own land transaction taxes with different rates.

Buying from abroad

• There are no restrictions on foreigners buying UK property; the 2% non-resident stamp duty surcharge applies.
• Overseas companies that own UK property must be on the Register of Overseas Entities at Companies House.

Official guidance: GOV.UK: Stamp Duty Land Tax (non-UK resident rates) · GOV.UK: Register of Overseas Entities

How rental income is taxed

• Rental profit is added to your other UK income and taxed at 20%, 40% or 45% (Scotland has its own rates). The tax year runs from 6 April to 5 April.
• File a Self Assessment return online by 31 January after the tax year ends, and pay what you owe the same day; payments on account are due on 31 January and 31 July.
• Mortgage interest is not deducted from rental profit. Instead you get a tax credit worth 20% of the interest.
• Landlords living abroad: under the Non-Resident Landlord Scheme your letting agent (or tenant) deducts basic-rate tax from the rent unless HMRC approves you to receive it in full.
• From April 2026, landlords with qualifying income over £50,000 must keep digital records and send quarterly updates under Making Tax Digital.

Allowable expenses (claimable against rental income)

• Letting agent and management fees, and accountancy fees.
• Repairs and maintenance (not improvements).
• Landlord insurance, ground rent and service charges.
• Council tax and utility bills you pay for the property.
• Replacing furniture, appliances and other domestic items.
• Mortgage interest only as the 20% tax credit described above.

Tenancy rules (England)

• From 1 May 2026 the Renters' Rights Act made tenancies periodic and ended section 21 "no-fault" evictions; landlords must use a legal ground for possession.
• Rent can be raised once a year using the statutory notice process.
• Deposits are capped at five weeks' rent (where the yearly rent is under £50,000) and must be protected in a government-approved scheme within 30 days.
• Check every adult tenant's right to rent, and keep gas safety (yearly), electrical (every five years) and energy performance certificates up to date.

Key dates

• 5 April: Tax year ends
• 5 October: Register for Self Assessment if you started letting in the tax year just ended
• 31 January: Online tax return and balancing payment, plus the first payment on account
• 31 July: Second payment on account
• Every 12 months: Gas safety check

Questions landlords ask

What is a good rental yield in the UK?

Gross yields of 5–7% are common outside London and 3–5% in London. Because mortgage interest only earns a 20% tax credit, check the cash flow with the loan included in the rental yield calculator for the UK.

Can I claim mortgage interest against rental income in the UK?

Not as a deduction. Individual landlords get a tax credit worth 20% of the mortgage interest instead, which matters most for higher-rate taxpayers.

How are landlords who live abroad taxed on UK rent?

Under the Non-Resident Landlord Scheme the letting agent or tenant deducts basic-rate tax from the rent unless HMRC approves you to receive it in full. You still file a Self Assessment return each year.

How much stamp duty does a buy-to-let pay in England?

The normal bands plus 5 percentage points on each band, and another 2 points if you are not UK resident.

Can landlords still use section 21 in England?

No. Since 1 May 2026 tenancies are periodic and landlords must use one of the legal grounds for possession, for example selling or moving in, with the required notice.

Official sources

• GOV.UK: Stamp Duty Land Tax
• GOV.UK: Renting out a property
• GOV.UK: Non-Resident Landlord Scheme
• Renters' Rights Act 2025