Property Income Allowance 2026/27 — £1,000 Tax Free
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Try free →The £1,000 property allowance, precisely
Every individual gets £1,000 of tax-free property income each year, for 2026/27 as in previous years. It applies per person, not per property, so it doesn’t matter whether you own one flat or five — the allowance is still just £1,000 in total against your combined property income.
- Gross property income of £1,000 or less is fully covered by the allowance and generally doesn’t need reporting to HMRC at all
- Above £1,000, you choose between deducting the flat £1,000 allowance or your actual itemised expenses — whichever is higher — but you cannot combine both in the same tax year
- If your real expenses (letting fees, insurance, repairs, accountancy) are already above £1,000, using the allowance instead of actual costs will almost always leave you worse off
- The allowance cannot be set against income from a property let to a "connected person" such as a close family member in certain arrangements — check your specific situation if this applies
Not to be confused with Rent a Room relief
The Property Allowance is separate from the Rent a Room Scheme, which lets you earn up to £7,500 tax-free from letting a furnished room in your own main home — a much larger allowance, but only available if you live in the property yourself. You can’t claim both allowances against the same income; pick whichever genuinely applies to your situation.