Property Income Allowance Calculator
Calculate whether to use the £1,000 property allowance or actual expenses for rental income. See which option minimises your tax bill.
Total rent received
Repairs, insurance, agent fees
Can Deduct
- • Repairs and maintenance
- • Insurance premiums
- • Letting agent fees
- • Accountancy fees
- • Ground rent and service charges
- • Council tax (if you pay it)
Cannot Deduct
- • Capital improvements
- • Personal use costs
- • Mortgage capital repayments
- • Full mortgage interest (restricted)
What is the £1,000 property allowance?
The property allowance lets you earn up to £1,000 from property income tax-free. This includes rent from a spare room (if not using Rent a Room relief), parking space rental, or letting your driveway. If your gross income is £1,000 or less, you don't need to declare it.
Can I use both property and trading allowance?
Yes, if you have both property income and trading income, you can claim both £1,000 allowances separately. This gives you up to £2,000 of combined tax-free income from these sources.
How does this differ from Rent a Room relief?
Rent a Room relief is £7,500 tax-free for renting a furnished room in your home. You can't use both - choose whichever is better. Rent a Room is usually better if you're letting a room. The property allowance is better for other property income like driveway rental.
When should I use actual expenses instead?
Use actual expenses when they exceed £1,000. For example, if you have £3,000 rental income and £1,500 expenses, using expenses gives £1,500 profit vs £2,000 with the allowance. Common expenses include repairs, insurance, agent fees, and mortgage interest (with restrictions).
Understanding the Property Income Allowance
The £1,000 property income allowance simplifies tax for landlords with small amounts of rental income. It's ideal for casual letting such as renting your driveway, storage space, or occasional Airbnb.
Disclaimer: This calculator provides estimates. Your actual tax may vary. Consult a tax professional for complex property portfolios.
Calculator reviewed by Waqas Sagar, Tax Specialist, updated January 2025.