Making Tax Digital for Rental and Property Income

For Making Tax Digital, a landlord is anyone receiving UK property income — including buy-to-let owners, accidental landlords, furnished holiday let operators, and residential or commercial property investors. Joint landlords assess MTD against their own share of the gross rental income.

• Over £50,000 — mandated from 6 April 2026.
• £30,000–£50,000 — mandated from 6 April 2027.
• £20,000–£30,000 — mandated from 6 April 2028.
• Under £20,000 — not currently in scope, though HMRC may extend the regime later.

The threshold uses gross income (rent received before expenses), not net profit. Self-employment income and rental income are added together to test the threshold.

Full thresholds guide →

1. Keep digital records of all rental income and allowable expenses in MTD-compatible software or bridging tools.
2. Submit a quarterly update to HMRC summarising property income and expenses.
3. Submit a final declaration after the tax year to confirm and finalise figures (this replaces the property pages of the old Self Assessment return).

How quarterly updates work →

Recorded properly in your software, typical allowable property costs include:

• Letting agent and management fees
• Repairs and maintenance (but not improvements, which are capital)
• Landlord insurance
• Ground rent, service charges and council tax or utilities you pay
• Safety certificates, licensing and professional fees

Keeping these categorised through the year is what makes each quarterly update quick and your final declaration accurate.

For residential lets, mortgage and other finance costs are not deducted as an ordinary expense. Instead you receive a basic-rate (20%) tax reduction based on the finance costs for the year. In MTD terms this matters because the adjustment is applied at your final declaration, not in the quarterly updates — so your quarterly figures show rent and running costs, and the finance-cost relief is calculated at year end. Make sure your software is set up to record finance costs correctly.

• Buy-to-let / residential lets — standard UK property income, all aggregated into one UK property business.
• Furnished holiday lets — since the FHL regime was abolished from April 2025, these are now treated as ordinary property income.
• Commercial property — also part of your UK property business.
• Foreign property — reported as a separate property business with its own rules.
• Rent-a-room — if you let a room in your own home, the Rent a Room scheme may exempt income up to £7,500; check whether it applies before assuming you must report.

Landlord-friendly MTD software includes Hammock, Landlord Studio, Coconut, FreeAgent, and bridging tools for spreadsheet users. Choose software that handles multi-property portfolios, allowable expense categories specific to property, joint ownership splits, and the finance-cost treatment described above.

Compare landlord MTD software →