From 6 April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory for landlords with gross property income over £50,000 [1]. This means you must use compatible software to keep digital records and submit quarterly updates to HMRC. Choosing the right property accounting software UK is no longer optional, it is a legal requirement for many landlords.

This guide covers the best software options available, what features to prioritise, and how to prepare for the MTD deadline. Whether you manage one buy-to-let or a portfolio of HMOs, the right software will save you time and help you stay compliant.

Why Landlords Need Property Accounting Software in 2026

MTD for Income Tax requires you to create and store digital records of your property income and expenses [1]. You cannot rely on spreadsheets alone unless they are linked to HMRC-compatible bridging software. The software must send quarterly updates to HMRC and an end-of-period statement (EOPS) after the tax year ends.

If your gross property income is between £30,000 and £50,000, you will be mandated from April 2027 [2]. Landlords with income below £30,000 are not yet mandated, but many choose to adopt software early to simplify their record-keeping.

Using dedicated property accounting software UK also helps you track expenses, calculate mortgage interest relief under Section 24, and generate reports for your accountant. For a full breakdown of what you can claim, see our landlord tax deductions guide.

Key Features to Look for in Property Accounting Software

Not all accounting software is suitable for landlords. Here are the essential features to consider:

  • MTD compatibility: The software must be on HMRC’s recognised list for MTD for Income Tax [1].
  • Property-specific functionality: Look for features like property-by-property tracking, tenant management, and expense categorisation.
  • Quarterly submission capability: The software must allow you to send quarterly updates to HMRC directly.
  • Multi-property support: If you own several properties, ensure the software can handle multiple units and separate income streams.
  • Bank feed integration: Automatic import of transactions saves manual data entry.
  • Section 24 calculation: The software should calculate the 20% tax credit on mortgage interest automatically.
  • Agent access: If you use a property accountant, they should be able to access your data and submit on your behalf.

You can use HMRC’s software finder tool to check which products are recognised [1]. All software listed has been through HMRC’s recognition process, so you can trust it meets the technical standards.

Best Property Accounting Software UK Options for 2026

Below are the leading software options that UK landlords commonly use. Prices and features change, so always check the latest details before committing.

FreeAgent

FreeAgent is a popular choice among landlords and small property businesses. It offers MTD-compatible submissions, bank feeds, and project-based tracking for each property [3]. FreeAgent also handles VAT if you are VAT-registered, and it integrates with major banks. It is often included free with some business bank accounts, which can reduce your costs.

Xero

Xero is a cloud-based accounting platform widely used by accountants and property professionals. It supports MTD for Income Tax, has strong bank reconciliation features, and allows you to track income and expenses by property. Xero also offers add-ons specifically for property management, such as inventory tracking and tenant deposit recording.

QuickBooks

QuickBooks is another established option with MTD compatibility. It is suitable for landlords who want a straightforward interface and robust reporting. QuickBooks allows you to categorise transactions by property, generate profit and loss reports, and submit quarterly updates to HMRC.

Hammock

Hammock is a newer entrant designed specifically for landlords. It focuses on MTD compliance and property-specific features like rent tracking, expense logging, and automatic Section 24 calculations [4]. Hammock is a good choice if you want a simple, landlord-focused tool without the complexity of a full accounting suite.

MRI Software

MRI Software is a more comprehensive property management platform used by larger portfolios and professional landlords. It includes accounting, tenant management, and compliance features. MRI Software is often used by property accountants and managing agents [5]. It may be overkill for a single property but works well for portfolios of 10+ units.

How to Choose the Right Software for Your Portfolio

Your choice depends on the size and complexity of your portfolio. Here is a quick guide:

  • 1-3 properties: Hammock or FreeAgent are cost-effective and easy to use.
  • 4-10 properties: Xero or QuickBooks offer more flexibility and better reporting.
  • 10+ properties or HMOs: MRI Software or a custom solution with a dedicated accountant may be better.
  • If you use an accountant: Ask them which software they prefer. Many accountants have a standard platform they use for all clients, which can simplify collaboration. Read our guide on how to choose a property accountant for more advice.

Preparing for MTD: What You Need to Do Now

If you are mandated from April 2026, you should start preparing now. Here are the steps:

  1. Check your income: Calculate your gross property income for the 2025/26 tax year. If it exceeds £50,000, you must sign up for MTD [6].
  2. Choose your software: Select an HMRC-recognised product and set up your account.
  3. Digitise your records: Transfer your historical data into the software. You only need digital records from the start of the MTD period, but having a full year of data helps with reporting.
  4. Sign up for MTD: You must sign up via your Government Gateway account. Your accountant can do this on your behalf using OAuth 2.0 authorisation [6].
  5. Test the system: Submit a test quarterly update to ensure everything works before the first real deadline.

If you are unsure about your obligations, speak to a specialist. Our team at Property Tax Partners can help you choose the right software and set up your MTD compliance.

Common Mistakes Landlords Make with Property Accounting Software

Even with good software, landlords often make errors. Avoid these pitfalls:

  • Using multiple software products: HMRC states you cannot use more than one software product to send quarterly updates of your property income or expenses [1]. Stick to one platform.
  • Not keeping digital records of everything: You must record all income and expenses digitally. Paper receipts are not sufficient for MTD purposes.
  • Ignoring bank feed errors: Bank feeds can mis-categorise transactions. Review them regularly to ensure accuracy.
  • Forgetting to submit on time: Quarterly deadlines are fixed. Set reminders or authorise your accountant to submit for you.
  • Not backing up data: Cloud software usually handles backups, but always export a copy of your records periodically.

Cost of Property Accounting Software

Prices vary widely. Here are typical monthly costs (as of early 2026):

  • Hammock: £10-£20 per month for basic landlord features.
  • FreeAgent: £10-£30 per month, often free with a business bank account.
  • Xero: £12-£35 per month depending on the plan.
  • QuickBooks: £10-£25 per month for the self-employed plan.
  • MRI Software: £50-£150+ per month for larger portfolios.

These costs are tax-deductible as a professional expense. You can claim them against your rental income. For a full list of deductible costs, see our landlord tax deductions guide.

What Happens If You Don't Comply with MTD?

HMRC has not yet published detailed penalties for MTD for Income Tax, but late submissions and failure to keep digital records are likely to attract penalties similar to those for VAT MTD. The best approach is to comply from the start. If you are unsure, get professional advice. Our contact page can connect you with a specialist property accountant.

Final Thoughts

Choosing the right property accounting software UK is essential for MTD compliance and efficient portfolio management. Start early, test your chosen software, and consider working with an accountant who understands property tax. The April 2026 deadline is approaching fast, and preparation now will save you stress later.

For more guidance on MTD, read our MTD for landlords deadline guide. If you are considering incorporating your portfolio, see our buy-to-let limited company guide.

Sources

  1. gov.uk: Choose the right software for Making Tax Digital for Income Tax
  2. icaew.com: Making Tax Digital for landlords: what accountants need to know
  3. freeagent.com: Accounting software for landlords - FreeAgent
  4. usehammock.com: Hammock: Landlord Software for Making Tax Digital
  5. jobs.accaglobal.com: Property Accountant (UK Hours) job with MRI Software | 13828062
  6. developer.service.hmrc.gov.uk: Customers and agents preparing for Making Tax Digital for Income Tax