Property Allowance Checker
Check whether the £1,000 property allowance covers your rental income, or whether claiming it beats claiming your actual expenses.
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Property Allowance Checker
Check whether the £1,000 property allowance covers your rental income, or whether claiming it beats claiming your actual expenses.
Used only if you claim actual expenses instead of the £1,000 allowance.
You can deduct either the £1,000 property allowance or your actual expenses, not both. The allowance usually wins when your expenses are under £1,000. It cannot be used against income from a company you are connected with, or alongside rent-a-room relief on the same income.
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How the £1,000 property allowance works
The property allowance gives every individual £1,000 of tax-free property income a year. If your gross rental income for the year is £1,000 or less, it is exempt and you generally do not need to report it at all, which is useful for occasional or very small lettings.
If you earn more than £1,000, you choose between two ways of working out the taxable amount. You can claim the £1,000 allowance and pay tax on the rest, or you can ignore the allowance and deduct your actual allowable expenses instead. You cannot do both, so the better option depends on whether your real expenses are above or below £1,000.
For a landlord with meaningful costs, repairs, letting fees, insurance and the like, actual expenses usually beat the flat £1,000. For someone with very low costs, such as a driveway or storage let, the allowance is simpler and often gives the lower bill.
There are some restrictions. The allowance cannot be used against income from a company you or a connected person controls, and not at the same time as rent-a-room relief on the same income. If in doubt, we can check what you need to declare.
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FAQ
Frequently asked questions
Generally no. If your gross property income for the year is £1,000 or less, the property allowance makes it tax-free and you usually do not need to report it. Above £1,000 you do need to declare it.
No. You claim either the £1,000 property allowance or your actual allowable expenses, whichever gives the lower taxable figure, but not both in the same year.
When your actual allowable expenses are less than £1,000. If your real costs are higher, claiming actual expenses usually gives a lower tax bill than the flat allowance.