Buy to let tax UK 2026: Stamp Duty, Section 24 and what to do next

Understanding buy to let tax UK 2026 rules matters whether you own a single rental property or a growing portfolio, because landlords face several taxes that don't apply in the same way to homeowners.

Buy-to-let landlords in the UK pay tax in five main areas: Income Tax on rental profits, Stamp Duty when buying a property, the Section 24 restriction on mortgage interest relief, Capital Gains Tax when selling, and reporting obligations under Making Tax Digital from April 2026.

• Income Tax on rental profits, at your usual Income Tax band
• Stamp Duty, including the surcharge that applies to additional properties
• Section 24 restrictions, which limit mortgage interest relief to a 20% tax credit
• Capital Gains Tax when you sell a buy-to-let property
• Making Tax Digital reporting requirements, starting April 2026

Each of these is covered in detail below, along with what's changing this year and how the structure of your mortgage can affect your overall tax position.

Most buy-to-let mortgages sit outside the Financial Conduct Authority's regulated mortgage contract regime, though the firms arranging them are still authorised and regulated for other activities. You can check any firm's status on the Financial Conduct Authority Register.

Making Tax Digital for Income Tax is one of the biggest buy to let tax changes 2026 brings for landlords. If your total rental and self-employment income is over £50,000, you'll need to keep digital records and send quarterly updates to HMRC using approved software, rather than filing a single annual Self Assessment return.

Once you're within scope, you'll need to submit a quarterly summary of income and expenses, plus a final end-of-year declaration. HMRC maintains a list of approved software - a spreadsheet alone won't be sufficient unless it's linked to compatible bridging software.

If you're close to either threshold, it's worth speaking to an accountant or advisor now rather than waiting until the deadline. Full details of the requirements are available from HMRC's Making Tax Digital for Income Tax guidance.

Stamp Duty is due when you buy a property in England or Northern Ireland, and buy-to-let purchases attract a surcharge on top of the standard residential rates.

As an example, on a £250,000 buy-to-let property purchased in 2026, you would pay £12,500 in Stamp Duty, compared with £2,500 on the same property bought as a primary residence. This is an illustrative example only - your own Stamp Duty bill depends on the exact purchase price and whether you already own other property.

You can check the figure for your own purchase using our stamp duty calculator, or find full guidance on HMRC's Stamp Duty Land Tax pages.

Section 24 limits landlords to a 20% tax credit on mortgage interest, regardless of their tax band. Higher and additional-rate taxpayers can no longer deduct the full cost of their mortgage interest from rental income before working out their tax bill.

This applies whether you hold one buy-to-let property or several, and it's had a significant impact on the profitability of higher-rate landlords since it was phased in. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it, so any decision to restructure borrowing should be weighed carefully against affordability.

This is where your mortgage and your tax position connect. If you haven't reviewed your borrowing in a while, comparing current buy-to-let mortgages or looking to remortgage to a buy-to-let deal could reduce the interest you're paying, which in turn reduces the income Section 24 applies to.

Rental profits are added to your other income and taxed at your usual Income Tax rate, after deducting allowable expenses. The personal allowance and tax band thresholds remain frozen for the 2025/26 tax year, which means more landlords are being pulled into higher tax bands as rents and profits rise - a process often called fiscal drag.

These thresholds are frozen until at least the 2027/28 tax year, and Income Tax rates on property income are confirmed to rise by a further 2 percentage points from April 2027. That makes it worth reviewing your allowable expenses and overall structure now, rather than waiting for the increase to land.

When you sell a buy-to-let property for more than you paid for it, Capital Gains Tax is due on the gain, after deducting your annual exempt amount and any allowable costs such as Stamp Duty and estate agent fees.

If you sell a buy-to-let property, you must report and pay any Capital Gains Tax owed within 60 days of completion, rather than waiting for your annual Self Assessment deadline. Missing this window can trigger penalties and interest.

Private residence relief, which shelters gains on your main home, does not apply to a property that's been let out as a pure investment. Full guidance on rates, reliefs and reporting is available from HMRC's Capital Gains Tax on property guidance.

Some landlords choose to hold buy-to-let property through a limited company rather than personally, mainly because mortgage interest is fully deductible as a business expense rather than restricted by Section 24. It isn't automatically the better option though - the right structure depends on your tax band, how many properties you hold, and your long-term plans.

Moving an existing property you already own into a limited company counts as a sale and purchase for tax purposes, which can trigger both Stamp Duty and Capital Gains Tax. This is usually best considered before you buy, rather than after.

Lenders apply their own underwriting standards to buy-to-let lending, including limited company applications, in line with guidance such as the Prudential Regulation Authority's supervisory statement on buy-to-let underwriting. An advisor can compare buy-to-let mortgage rates for both personal and limited company applications, so you can weigh the tax position against the mortgage options actually available to you.

With Making Tax Digital, Section 24 and frozen tax thresholds all affecting landlords in 2026, it's worth working through your buy to let tax UK 2026 checklist now rather than waiting for a deadline to force your hand.

If you're planning refurbishment work before re-letting a property, a secured loan for property improvements is one option for funding the work, though remember your home or the secured property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

If you're feeling overwhelmed by the number of changes landing at once, impartial money guidance is also available from MoneyHelper on 0800 138 7777.