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Buy-to-let profitability calculator
Change any input and every figure updates instantly. All maths shown, using 2025/26 England rules.
Gross yield
6.39%
Net yield
5.15%
Before finance & tax
Monthly cash flow
£210
Before tax
Annual cash profit
£165
After mortgage & tax
ROI on cash
0.29%
£57,100 invested
Total tax paid
£2,360
Income tax
Under Section 24, you are taxed on £9,275 but only get £1,350 back as a 20% credit. If you are a 40% taxpayer, you pay 40% tax but only get 20% back — this is why BTL is often unprofitable in personal name.
Tax comparison: Personal (40% band) vs Ltd company
Personal name
Tax £2,360
Cash profit £165
Ltd company (19%–25%)
Corp tax £480
Cash in company £2,045
You pay Corp Tax + Dividend Tax (£522) if you take it out.
How this is calculated
- Annual rent = monthly rent × (12 − void months)
- Allowable expenses = agent + management + maintenance + insurance + service charge + ground rent + licensing + other (NOT mortgage interest)
- Mortgage interest = interest actually paid in year one (loan × rate if interest only)
- Personal tax = income tax on (other income + rent profit) − income tax on other income alone, across the real 20/40/45% bands
- Section 24 credit = 20% × lowest of: interest, property profit, income above your personal allowance. Unused interest carries forward
- Dividend tax = dividends stacked on top of your other income at 8.75/33.75/39.35%, first £500 tax-free
- Ltd profit = rent − expenses − interest; Corp tax 19% ≤ £50k, 25% ≥ £250k, marginal relief between
- Gross yield = annual rent ÷ price
- Monthly cash flow = (rent − expenses) ÷ 12 − mortgage payment
- Annual cash profit = rent − expenses − mortgage payments − tax
- ROI = annual cash profit ÷ (deposit + SDLT + legal fees + refurb)
- SDLT: 0/2/5/10/12% bands, +5% on every band for additional properties
Explain my figures in plain English
AI-powered summary of your tax estimate, Section 24 and the assumptions behind it — using the figures you've entered.
Annual cash flow
Running cost breakdown
- Management £1,150
- Maintenance £575
- Insurance £300
- Other £200
Tax breakdown — Section 24
Mortgage interest CANNOT be deducted as an expense — you get a 20% tax credit only.
- Rent collected
- £11,500
- − Allowable running costs
- £2,225
- = Taxable profit (interest NOT deducted)
- £9,275
- Extra income tax on top of your £60,000 other income
- £3,710
- − 20% credit on £6,750 (lowest of interest, property profit, income above allowance)
- £1,350
- = Income tax payable
- £2,360
- Tax if interest were fully deductible
- £1,010
- Extra tax caused by Section 24
- £1,350
Stamp Duty (SDLT) — England
| Band | Rate | Tax |
|---|---|---|
| £0 – £125,000 | 5% | £6,250 |
| £125,000 – £250,000 | 7% | £3,850 |
| Total SDLT | incl. 5% surcharge | £10,100 |
Cash invested = deposit £45,000 + SDLT £10,100 + costs £2,000 = £57,100. Interest shown is year-one.
Stress test
Base case
£210/m
Rates +2%
-£15/m
3-month void
£33/m
Rent −10%
£129/m
All three
-£255/m
Estimates only, based on year-one figures and 2025/26 England rules. Assumes no savings income, Scottish rates or brought-forward losses, and one company with no associated companies. Not tax advice.