Rental yield and Section 24 calculator 2026/27
For buy-to-let landlords. Put in the price, the rent and your other income, and see the yield, the cash the property makes each month after the mortgage and tax, and what Section 24 costs you.
Or its value now, for a property you already own.
Salary, pension or self-employed profit, before tax. The rent is taxed on top of it.
Mortgage
25 is usual for buy-to-let. 100 if there's no mortgage.
Running costs
Between tenancies. Two to four is common.
Full management is often 12% to 18% with VAT. 0 if you manage it yourself.
Gas and electrical safety checks, licensing, accountant, bills between tenants.
Buying costs
For the stamp duty, LBTT or LTT.
Refurbishment, furniture, first certificates.
Your rental figures
£0.00
Scenarios side by side
Section 24, line by line
| Section 24 | Old rules |
|---|
The same property at other incomes
| Other income | Rent tax | Old rules | S24 cost |
|---|
Personally or through a limited company
| Personally | Limited company |
|---|
Rates checked against GOV.UK on 7 October 2026. Sources
How the figures work
Gross yield is a year's rent divided by the price. Net yield uses the rent you actually collect, after empty weeks, less the running costs. Neither counts the mortgage, so you can compare properties fairly. Cash flow then takes off the mortgage payments and income tax, and return on your cash divides it by everything you put in: deposit, stamp duty or its Scottish and Welsh equivalents, fees and work before letting.
The income tax is the extra tax the rent adds on top of your other income, at your own rates, including Scotland's. Under Section 24 the mortgage interest isn't deducted; you get a credit of 20% of the lowest of the interest, the rent profit and your income over the personal allowance, and any interest left over carries forward.
| A year | |
|---|---|
| Rent: £1,250 a month, empty 2 weeks | £14,423.08 |
| Agent 12%, maintenance, insurance and other costs | −£3,480.77 |
| Rent profit before interest (taxed under Section 24) | £10,942.31 |
| Interest: £187,500 interest-only at 5% | −£9,375.00 |
| Income tax: 20% of £10,942.31, less a 20% credit on £9,375 | −£313.46 |
| Cash flow after tax | £1,253.85 |
On £35,000 of other income it all stays in the basic rate band, so Section 24 costs nothing. On £60,000 the same property owes £2,501.92 instead of £626.92: Section 24 costs £1,875 a year, every penny of the landlord's credit lost at 40%.
Making Tax Digital for Income Tax applies to gross rent plus self-employed turnover:
| Qualifying income | Quarterly updates from |
|---|---|
| Over £50,000 (2024/25 return) | 6 April 2026 |
| Over £30,000 (2025/26 return) | 6 April 2027 |
| Over £20,000 (2026/27 return) | 6 April 2028 |
The calculator is for residential lets owned by individuals. It leaves out jointly owned property (put in your share), rent-a-room and the £1,000 property allowance, replacing furniture, capital gains tax when you sell, and rent or price changes over time. Furnished holiday lets have been taxed like other lets since April 2025, so they work here too.
Rates checked against GOV.UK, Revenue Scotland and the Welsh Government on 7 October 2026. Income tax figures are for the 2026/27 tax year (6 April 2026 to 5 April 2027), with the announced rates from April 2027 alongside.
- Income tax when you rent out a property (GOV.UK)
- Section 24: how the finance cost restriction is worked out (GOV.UK)
- Property income rates from April 2027: technical note (GOV.UK)
- Income tax rates and allowances (GOV.UK)
- Scottish income tax (GOV.UK)
- Corporation tax rates (GOV.UK)
- Tax on dividends (GOV.UK)
- Making Tax Digital for Income Tax: who it applies to (GOV.UK)
- SDLT: buying an additional residential property (GOV.UK)
- Additional Dwelling Supplement (Revenue Scotland)
- Land Transaction Tax rates and bands (Welsh Government)
What is a good rental yield in the UK?
Gross yield is the year's rent divided by the price: £1,250 a month on a £250,000 flat is 6%. Many landlords aim for 5% to 8% gross, but the figure that matters is what's left after running costs, the mortgage and tax. Net yield takes off voids, letting fees, repairs and insurance; cash flow and return on your cash also take off the mortgage and tax, which is what this calculator shows.
How do you work out net rental yield?
Take the rent you actually collect in a year (allowing for empty weeks), subtract the running costs (letting fees, maintenance, insurance, service charge and ground rent, certificates and the like), and divide by the price. Mortgage costs are left out of net yield so you can compare properties; they come into cash flow.
What is Section 24 and how does it affect landlords?
Since April 2020, individual landlords can't deduct mortgage interest from rental income. You're taxed on the profit before interest and get a tax credit of 20% of the interest instead. A basic-rate taxpayer ends up about the same; a higher-rate taxpayer loses the other 20% (25% for additional rate), and the larger profit can push you into a higher band, cost you your personal allowance over £100,000 or bring in the Child Benefit charge over £60,000.
Can Section 24 make me pay tax when I'm losing money?
Yes. Because the interest isn't deducted, you can owe tax on a property whose rent doesn't cover the mortgage and costs. If the 20% credit can't all be used in the year, the unused part carries forward to later years.
Does Section 24 apply to limited companies?
No. A company deducts its mortgage interest in full and pays corporation tax (19% to 25%) on the rest, but you then pay dividend tax to take the money out, buy-to-let mortgages for companies tend to cost more, and moving property you already own into a company usually means capital gains tax and stamp duty. The calculator compares the two at a headline level; get advice before deciding.
What changes for landlords in April 2027?
From 6 April 2027 property income gets its own income tax rates in England and Northern Ireland: 22%, 42% and 47%, two points above the rates on other income, with the finance cost credit rising to 22%. Scotland and Wales will set their own property rates. The calculator shows the April 2027 figure next to this year's.
Do landlords need Making Tax Digital?
Making Tax Digital for Income Tax looks at your gross rent plus any self-employed turnover, before expenses. Over £50,000 (on the 2024/25 return) you're in from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028, sending quarterly updates through software.
Is stamp duty higher on a buy-to-let?
Yes. In England and Northern Ireland the higher rates are 5 points above the normal rates on every band, so £15,000 on a £250,000 buy-to-let. Scotland charges an 8% Additional Dwelling Supplement on the whole price and Wales has its own higher rates. Our stamp duty calculator covers all three.
Keep a year of rent in order
The SortedDesk Landlord Spreadsheet logs rent, expenses and mortgage interest for each property and totals them against the Self Assessment box numbers, with the Section 24 finance cost reduction, quarterly Making Tax Digital totals and a property allowance comparison. Landlord apps such as Landlord Vision (£7.99 to £84.97 a month) and Hammock (£8 to £31.50 a month), both plus VAT, charge every month; the spreadsheet is a one-off £4.99 plus VAT, for Excel, Numbers and Google Sheets. Prices checked 7 October 2026.
Letting a holiday home? The Holiday Let Income Spreadsheet handles bookings by platform, occupancy and the property page totals.
An estimate to help you plan, not financial or tax advice. It doesn't file or send anything to HMRC, and it can't know everything about your situation. Check your own position on GOV.UK or with an accountant.
Choose Scotland for Scottish income tax on the rent; the Section 24 credit stays at 20% UK-wide. Welsh rates of income tax are currently the same as England's. Land taxes follow where the property is.