MTD for Income Tax: what changes for landlords

Last updated 19 August 2026

Making Tax Digital for Income Tax applies to landlords on exactly the same timetable as the self-employed. If you let property in the UK or abroad, the change reaches you the same way it reaches a sole trader — but a few details work differently, and they are the ones worth understanding early.

Your threshold is based on gross rents

Qualifying income for property is your gross rental income before expenses — the rent as it comes in, not what is left after the mortgage interest, the letting agent and the repairs.

This catches a lot of landlords out. A portfolio producing £40,000 of rent with £30,000 of costs has qualifying income of £40,000, so it is inside the April 2027 threshold even though the taxable profit is £10,000.

The dates are the same as everyone else’s:

Source: GOV.UK: check if you must use Making Tax Digital for Income Tax.

And if you also trade as a sole trader, the two are added together for the test. Rent of £22,000 plus £12,000 of consultancy is £34,000 of qualifying income — in from April 2027, even though neither on its own would be.

Property is a separate business from your trade

If you have both rental income and a trade, HMRC treats them as two separate income sources. That means two sets of quarterly updates — one for the property business, one for the sole trade — each with its own figures, submitted for the same quarters and by the same deadlines.

Within property, though, things group rather than split:

• All your UK properties are one UK property business, however many there are.
• All your overseas properties are a separate foreign property business.

You report the UK business as a whole. You do not file per-property updates.

What goes in a landlord’s quarterly update

The same shape as any other quarterly update — cumulative totals from 6 April, categorised, with no adjustments:

• Rent and other income from the property business
• Property expenses by category: repairs and maintenance, insurance, letting agent and management fees, legal and professional costs, rates and utilities, ground rents and services

What does not go in:

• Finance costs. Mortgage and loan interest on residential property is not deducted as an expense — it is relieved as a 20% tax reduction at the Final Declaration. This is the single biggest difference between property and trading updates. See GOV.UK: tax relief for residential landlords.
• Capital expenditure. Improvements, extensions and the property itself are capital, not an expense.
• Reliefs and allowances. Property income allowance, replacement of domestic items relief and the rest all wait for the Final Declaration.

Jointly owned property

If you own property jointly — very commonly with a spouse — each owner reports their own share. Your qualifying income is your share of the gross rents, not the whole.

There is a helpful easement here: for jointly owned property you are not required to keep digital records of the individual expenses, and can report only your share of the totals. If your co-owner handles the bookkeeping, that saves duplicating the whole ledger.

Note that the threshold test still uses your share of gross income, so two people splitting £50,000 of rent equally each have £25,000 of qualifying income.

Furnished holiday lettings

The furnished holiday lettings regime was abolished from April 2025. Property that used to qualify as an FHL is now taxed as ordinary property income, with the same treatment of finance costs and no separate capital allowances treatment.

For MTD purposes this simplifies things: there is no FHL category to report separately.

What landlords most often get wrong

Treating mortgage interest as an expense. It is not, for residential property. Putting it in as a property expense will make your quarterly figures wrong and your Final Declaration a correction exercise.

Forgetting the gross test. Heavily geared portfolios can have very little profit and still be comfortably over the threshold.

Assuming rent-a-room means exempt. Income under the Rent a Room limit does not create a reporting duty on its own, but if you have other property or trading income, the picture changes.

Where TaxSwipe fits

TaxSwipe today is built for sole traders — self-employment income and expenses. Property support is a later release, and the notice at the top of this page says where that stands.

We publish landlord guidance now because the rules apply to you on the same timetable regardless of which software you end up using, and because the threshold test is worth understanding well before your start date.

← All MTD guides