Landlord Self-Assessment: A Step-by-Step Walkthrough for the 2025-26 Tax Return

The 2025-26 tax year ended on 5 April 2026. The online self-assessment deadline is 31 January 2027. For most landlords the return itself is not complicated, but two areas catch people out every year: recording rental income and expenses correctly, and handling mortgage interest under Section 24.

Get those right and the rest of the return follows straightforwardly. This guide walks through the full process, step by step, with the key deadlines, a worked Section 24 example, and an explanation of why your January bill may be larger than you expect.

Do You Need to File?

You must register for self-assessment and submit a return if you received rental income during 2025-26, with one exception. If your total gross rental income was under £1,000, the property allowance covers it in full, no return is needed and the income is tax-free.

If gross rental income was between £1,001 and £2,500, HMRC asks you to contact them directly rather than register online. Above £2,500, you register through GOV.UK, receive a Unique Taxpayer Reference, and submit a full return.

Already registered from a previous year? Your UTR remains valid. No re-registration needed.

Source: GOV.UK guidance on income tax when you let property [verified May 2026]

The Two Forms: SA100 and SA105

Self-assessment uses a main return, the SA100, with supplementary pages attached for different income sources. Landlords need to include the SA105 UK property pages alongside their SA100.

Your SA100 covers all income, reliefs, and tax already paid. The SA105 is where rental income, allowable expenses, and mortgage interest are recorded. All UK properties owned personally are pooled on a single SA105. You do not need one per property.

If you are filing on paper, both forms are downloadable from GOV.UK. Filing online through HMRC's portal or any commercial software, the SA105 fields are built into the property income section automatically.

Calculating Your Rental Income

Rental income is the gross rent you received, or were entitled to receive, during the 2025-26 tax year from 6 April 2025 to 5 April 2026. HMRC uses the arising basis: rent falls in the year it was due, not necessarily when you were actually paid.

If a tenant pays late and rent for March 2026 arrives in May 2026, it still belongs in the 2025-26 return because that is when it was due.

A few points worth knowing:

• Letting agent arrangements: if an agent collects rent on your behalf, your gross rental income is the rent before the agent's fees. The fees are then deducted as an allowable expense.
• Deposits: not income when received. Only taxable if you retain all or part at the end of the tenancy.
• Multiple properties: add all rental income together across every property you own personally. Expenses from one property can be offset against income from another.

Source: GOV.UK guidance, income tax when you rent out a property [verified May 2026]

Allowable Expenses

You can deduct expenses that are wholly and exclusively incurred for the purpose of the letting. Common deductible items include:

• Letting agent fees (management fees, renewal fees, tenant-finding fees)
• Maintenance and repairs, such as fixing a boiler, replacing a broken window, or repainting between tenancies
• Buildings and contents insurance
• Ground rent and service charges on leasehold properties
• Accountancy fees for preparing your property accounts
• Advertising costs
• Utility bills that you pay directly as landlord

A few things that are not deductible:

• Mortgage capital repayment: only the interest portion feeds into the Section 24 calculation (see below). Capital repayments are not deductible.
• Capital improvements: adding an extension, fitting a new kitchen, or converting a loft are capital items. They do not reduce your rental income tax, though they may reduce a future capital gains tax bill.
• Stamp duty on purchase: a capital cost, not deductible against income.

One useful relief: replacement of domestic items. If you replace a sofa, bed, fridge, or similar furnishing on a like-for-like basis in a furnished let, the cost of the replacement is deductible. This is distinct from the old wear-and-tear allowance and applies to furnished and partly-furnished properties.

Source: GOV.UK guidance, work out your rental income [verified May 2026]

Section 24: The Bit That Changes Everything

Section 24 is the most important tax rule for any landlord with a residential mortgage. Since April 2020 it has been fully in force, and it works very differently from what many landlords still expect.

Section 24 is a tax credit, not a deduction. That distinction matters.

Under the old system, you deducted mortgage interest from rental income before working out your taxable profit. The deduction reduced your income at your marginal rate: a higher-rate taxpayer got 40p of relief for every pound of interest.

Under the current rules, you cannot deduct mortgage interest as an expense at all. Instead, you enter your total residential property finance costs in the dedicated box on the SA105. HMRC then calculates a 20% credit against your income tax liability. A higher-rate taxpayer still gets only 20p of credit for every pound of interest, regardless of the rate at which they pay tax on the inflated rental income.

Worked example: higher-rate taxpayer

Take a landlord with one property and total income that puts them in the higher-rate band:

• Annual rental income: £18,000
• Mortgage interest: £9,000
• Other allowable expenses: £3,000

Under the old rules:

• Taxable profit = £18,000 - £9,000 - £3,000 = £6,000
• Tax at 40% = £2,400

Under Section 24 (current):

• Taxable profit = £18,000 - £3,000 = £15,000 (mortgage interest not deducted)
• Tax on £15,000 at 40% = £6,000
• Less 20% credit on £9,000 mortgage interest = £1,800
• Net tax = £6,000 - £1,800 = £4,200

Same property, same mortgage, same income. But £1,800 more tax per year under the current rules.

Section 24 also has a knock-on effect for landlords who would otherwise sit comfortably in the basic rate band. Because mortgage interest is not deducted before taxable profit is calculated, gross rental income is added to total taxable income in full. A landlord earning £38,000 in salary and £15,000 in net rental profit (after expenses, before interest) has £53,000 of taxable income, already into the higher rate band even if the mortgage interest alone exceeds the profit.

Source: GOV.UK guidance, tax relief for residential landlords [verified May 2026]

Record-Keeping

HMRC expects records to support every entry on your return. For landlords that means records of all rent received, invoices or receipts for every expense claimed, mortgage statements showing interest paid, and any other supporting documents for the figures in your SA105.

Records must be kept for at least five years after the online filing deadline for that tax year. For the 2025-26 return, keep records until at least 31 January 2032.

If you are in scope for Making Tax Digital for Income Tax (gross income above £50,000 from April 2026), your quarterly digital records will already underpin these figures. Your end-of-year return is built from the quarterly updates submitted during the year. For the full MTD process, see our quarterly submission guide.

Filing Deadlines

Deadline	Date
Paper return	31 October 2026
Online return	31 January 2027
Tax payment	31 January 2027

Missing the online deadline triggers an automatic £100 penalty, even if no tax is owed. Further penalties apply at three months, six months, and twelve months late.

If you have never filed online before, you will need a Government Gateway account and an activation code sent by post. Allow up to ten working days for the code to arrive. Register well before January.

Source: GOV.UK self-assessment tax returns deadlines [verified May 2026]

Payment on Account

Many landlords find their January bill larger than expected. Payments on account are usually the reason.

If your 2024-25 self-assessment tax bill was more than £1,000, and more than 20% was not collected at source via PAYE, HMRC requires you to make two advance payments towards your 2025-26 tax bill. Each payment is 50% of the previous year's bill.

Due dates:

• First payment on account for 2025-26: 31 January 2027
• Second payment on account for 2025-26: 31 July 2027

On 31 January 2027 you may therefore owe the balancing payment for 2024-25 (if your earlier payments on account did not cover that bill in full) plus the first payment on account for 2025-26. That can add up to a significant total in a single payment.

If you expect your 2025-26 income to be materially lower than 2024-25, you can apply to reduce your payments on account through your Government Gateway account. Do this before the January deadline. If you reduce them and the actual tax turns out higher, HMRC charges interest on the shortfall.

Source: GOV.UK, understand your self-assessment bill, payments on account [verified May 2026]

April 2027: Rates Are Going Up

From 6 April 2027, property income tax rates increase by two percentage points across all bands:

Band	2025-26 rate	From April 2027
Basic rate	20%	22%
Higher rate	40%	42%
Additional rate	45%	47%

The Section 24 tax credit also increases to 22%, matching the new property basic rate. For a higher-rate taxpayer the gap between the credit rate (22%) and the tax rate on rental income (42%) stays the same in percentage terms, but the absolute cost is higher because both the income rate and the credit rate have shifted.

For landlords who are weighing up whether to continue operating personally or move into a limited company structure, this rate increase is a relevant data point. Our guide to buy-to-let limited companies covers the full calculation.

Source: GOV.UK, income-tax-changes-to-tax-rates-for-property-savings-and-dividend-income [verified May 2026]

Running your numbers through RealYield's calculator will show the after-tax return at both current and 2027 rates, alongside yield, cashflow, and stress test figures in one place.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently. Always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.