Property income

Updated on 30 December 2020

Other tax issues

Do you charge rent to someone else for living in a property that you own? Or do you sub-let a room in your house to a lodger? Having income from property, also known as rental income, means you need to consider your tax position. You may need to tell HMRC about it and possibly pay some tax if you make a profit.

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I have a lodger – what is the 'rent-a-room' scheme?

Where you have a lodger, who rents a furnished room in your home, and the income you receive each year before deducting any expenses is £7,500 or more, you pay tax on the extra income above this amount.

If the rents are below £7,500 per year, or – for letting by a couple – £3,750 each, the income is tax free.

You can find more information on the rent-a-room scheme on the dedicated page in this section.

Is my property income taxable?

Your profits from renting out a property are normally taxable income. Since 6 April 2017, there has been a property allowance of £1,000 – if your property income is less than £1,000 for 2020/21, you do not have to declare it to HMRC or pay tax on it, unless you make an election to do so.

You can find more information on renting out property and the property allowance on the dedicated page in this section.

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