What it is
The property allowance covers small amounts of property income, such as letting a driveway, a garage or storage space, without paperwork.
When it helps, and when it doesn't
It helps when real costs are under £1,000. Most buy-to-let landlords have far higher costs, and anyone with a mortgage loses the finance cost credit by using it.
| Rent £6,000, expenses £1,800, no mortgage | Taxable profit |
|---|---|
| Claim actual expenses | £4,200 |
| Use the property allowance | £5,000 |
Rent a Room is different
Letting furnished rooms in your own home qualifies for up to £7,500 a year tax-free (£3,750 each if shared). It's a separate relief.
The trading allowance is going up, but this one isn't
The Budget of 28 October 2026 tripled the trading allowance to £3,000 from 2027/28. That allowance covers self-employed side income, not rent. The property allowance stays at £1,000.
Sources
- GOV.UK: Tax-free allowances on property and trading income
- GOV.UK: Rent a Room Scheme
- HM Treasury: Budget documents, 28 October 2026
Sources last checked 9 November 2026. See all our sources and how we keep pages up to date.
This guide explains general rules for individual landlords in England, Wales and Northern Ireland. It isn't personal tax advice. Check GOV.UK or speak to a qualified adviser before you act.