Continue your plan
Useful next calculations
Rates & sources2026/27
2026/27 individual-landlord illustration. Residential finance costs are excluded from taxable property profit and may receive a 20% tax reduction subject to HMRC limits.
| Band / figure | Rate |
|---|---|
| Ownership model | individual landlord |
| Finance-cost deduction | 0% from property profit |
| Tax-reduction rate | 20% subject to limits |
| Mortgage capital | cash flow only |
Source: HMRC — residential landlord finance costs — source checked for 2026/27.
When to use this calculator
- Before buying, renting, refinancing or reviewing a property investment.
- When you want to compare cash flow, tax, yield or ownership costs.
- When you need a fast estimate before speaking to an agent, lender or adviser.
- When you want to see how a rate or price change moves the result.
A realistic UK planning example
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
| Input | Value |
|---|---|
| Your share of annual rent before voids (£) | £1,400 |
| Void or non-payment allowance (%) | 5 |
| Allowable non-finance expenses or deduction used (£) | 2500 |
| Your share of annual residential finance costs (£) | £200,000 |
After entering these figures, review annual cash flow after estimated tax, monthly cash flow after estimated tax and annual cash flow before tax together rather than in isolation. Then rerun the tool with one input adjusted.
How to read your results
Annual Cash Flow After Estimated Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Monthly Cash Flow After Estimated Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Annual Cash Flow Before Tax
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Estimated Property-Income Tax Effect
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Finance-Cost Tax Reduction
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Taxable Property Profit
Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.
Cash-on-Cash Return
A projected outcome under the growth rate you entered. Real-world returns fluctuate, so also check a more conservative assumption.
Rent-to-Interest Cover
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Method & assumptionsAuthoritative sources
This calculator combines your share of rent, a void assumption, allowable non-finance expenses, residential finance costs and mortgage capital payments to estimate cash flow for an individually owned UK residential property. It then compares the 2026/27 Income Tax estimate with and without the taxable property profit.
Residential mortgage interest is not deducted from the property profit in this model. Instead, the finance-cost tax reduction is 20% of the lowest of available finance costs, taxable property profit and the simplified adjusted-total-income amount, following HMRC's restriction for individual residential landlords. Mortgage capital reduces cash flow but not taxable profit.
This is not suitable for limited companies, furnished holiday letting periods governed by different rules, commercial property, trusts or a complete multi-property tax return. Savings, dividends, detailed allowance ordering and some carried-forward calculations are not modelled. Confirm allowable expenses, losses and finance costs using HMRC records or professional advice.
Common mistakes
- !Comparing rent and ownership costs without including taxes, fees and maintenance.
- !Using purchase price alone without testing financing or vacancy assumptions.
- !Relying on yield or growth in isolation instead of reviewing the full property case.
- !Using the wrong national transaction-tax calculator for the purchase location.
What to do next
- Run a second scenario with a higher rate or lower rental yield.
- Compare the result with a buy-versus-rent or mortgage calculator before making an offer.
- Use the matching national transaction-tax calculator for the purchase location.
- Note the key figures to share with your solicitor or lender.
Frequently asked
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