Buy-to-Let Profit Calculator

The buy to let profit calculator above turns your rent, mortgage and running costs into a clear picture of what you actually keep after tax - not the headline yield a letting agent quotes you. It is built for UK landlords weighing up a deal, comparing properties or sense-checking an existing rental, and it handles the two routes most people use: owning in your own name as an individual, or holding the property through a limited company. The difference between those two routes is large, and it is the reason this tool exists rather than a simple income-minus-costs sum.

What this buy to let profit calculator does

This is a rental profit calculator that works out your annual profit before tax, your tax bill, and your true take-home profit after tax. It also reports your net rental yield, so you can compare the return on a flat in Manchester against a terrace in Leeds on a like-for-like basis. Crucially, it applies the correct tax treatment depending on whether you tick the individual or limited company option - because buy to let tax is not the same for both, and using the wrong rules can flatter a deal by thousands of pounds a year.

Whether you are a first-time landlord running the numbers on your first purchase or a portfolio owner reviewing where your money works hardest, the aim is the same: replace guesswork and agent estimates with a figure you can actually plan around. What the tool gives you:

• Gross rental income - your annual rent before any deductions.
• Allowable running costs - letting fees, insurance, maintenance, service charges, ground rent and similar.
• Profit before tax - rent minus running costs (and minus mortgage interest for companies).
• Tax due - calculated under Section 24 rules for individuals, or corporation tax for companies.
• Net landlord profit - the cash that lands in your account after tax.
• Net rental yield - your annual return as a percentage of the property value.

How to use the calculator, step by step

The tool is designed to be filled in from top to bottom in under two minutes. Have a recent rent figure, your mortgage statement and a rough idea of annual costs to hand.

1. Choose your ownership type. Use the individual vs company toggle first - it changes the entire tax calculation underneath, so set it before anything else.
2. Enter the property value or purchase price. This is used to work out your net yield, not your tax, so use the figure that matters to you (current value for an existing let, purchase price for a deal you are appraising).
3. Add your annual rent. Multiply the monthly rent by 12. If you expect a void period, knock off a month or two to be realistic.
4. Enter annual mortgage interest. Use the interest element only, not capital repayment. On an interest-only buy to let loan, that is your full monthly payment × 12.
5. List your running costs. Insurance, letting and management fees, repairs, gas safety checks, service charges, ground rent and accountancy. These are deductible for both individuals and companies.
6. Set your tax position (individuals). Tell the tool your other income or marginal rate so it can apply the right band. For companies, it applies corporation tax automatically.
7. Read your results. The output splits profit before tax, tax due and profit after tax, plus your net yield.

How profit after tax is worked out for individuals (Section 24)

This is where most landlords get caught out. Since the Section 24 rules fully bit, an individual landlord cannot deduct mortgage interest as an expense. Instead, you are taxed on your rental profit before interest, and then you receive a 20% tax credit on the interest you paid. For a basic-rate taxpayer this roughly washes out. For a higher-rate (40%) or additional-rate (45%) taxpayer, it can push you into a much higher effective tax rate - and in extreme cases you can owe tax even when your real cash profit is modest.

The calculator follows the official method:

1. Taxable rental profit = rent − allowable running costs (mortgage interest is not deducted here).
2. Tax on that profit is charged at your marginal rate (20%, 40% or 45% for England, Wales and NI in 2026/27).
3. A tax credit of 20% × mortgage interest is then subtracted from the bill.
4. Profit after tax = real cash profit (rent − costs − interest) − the final tax due.

Worked example - higher-rate individual landlord

Say you receive £18,000 rent a year, pay £3,000 in running costs and £7,000 in mortgage interest, and you are a 40% taxpayer.

• Taxable profit (before interest): £18,000 − £3,000 = £15,000
• Tax at 40%: £6,000
• Section 24 tax credit: 20% × £7,000 = −£1,400
• Final tax due: £6,000 − £1,400 = £4,600
• Real cash profit: £18,000 − £3,000 − £7,000 = £8,000
• Profit after tax: £8,000 − £4,600 = £3,400

Notice the effective tax rate on the £8,000 of genuine profit is roughly 57%, not 40% - that is the Section 24 effect in action, and it is exactly what this rental profit calculator surfaces for you. To see how the credit alone is calculated in isolation, our Section 24 Calculator breaks it down line by line.

How it works for limited companies (corporation tax)

A limited company is taxed completely differently. The company can deduct mortgage interest in full as a business expense, then pays corporation tax on what is left. For the 2026 financial year, the rates are:

• Small profits rate - 19% on profits up to £50,000.
• Main rate - 25% on profits of £250,000 or more.
• Marginal relief between £50,000 and £250,000, which tapers the effective rate up from 19% towards 25%.

Because interest is deductible, companies often look more efficient where borrowing is high and the owner is a higher-rate taxpayer. The trade-off is that getting money out of the company (as salary or dividends) is a second tax event the calculator does not model - the figure shown is profit retained inside the company after corporation tax.

Worked example - same property in a limited company

Using the same £18,000 rent, £3,000 costs and £7,000 interest:

• Profit before tax: £18,000 − £3,000 − £7,000 = £8,000 (interest is deducted)
• Corporation tax at 19% (well under the £50,000 limit): £1,520
• Profit after tax (retained in company): £8,000 − £1,520 = £6,480

On identical numbers the company keeps £6,480 versus the individual's £3,400 - before any cost of extracting the cash. That gap is the single biggest reason landlords incorporate, and the calculator lets you test it on your own figures rather than relying on rules of thumb.

Individual vs limited company: side by side

Net rental yield explained

Yield tells you how hard your capital is working. The calculator reports net rental yield - annual profit after running costs as a percentage of the property value - which is far more honest than the gross yield agents advertise. Gross yield ignores every cost; net yield reflects what you actually clear before financing and tax.

The formula is: (annual rent − running costs) ÷ property value × 100. A £200,000 flat letting for £12,000 a year with £2,000 of costs gives a net yield of 5%. As a rough benchmark, many UK landlords look for a net yield above 4–5% to make a leveraged purchase worthwhile once financing and tax are layered on top, though the right number depends entirely on your area, void risk and growth expectations. If you want to explore yield on its own, including gross vs net comparisons across several properties, use our dedicated Rental Yield Calculator.

One word of caution: a high yield in a cheap area can come with higher voids, tenant turnover and maintenance, while a lower-yielding property in a strong location may deliver more capital growth. The calculator measures income return, not the full total return, so treat net yield as one input among several rather than a single verdict on a deal.

Frequently asked questions

Does the calculator include mortgage capital repayments?

No - and that is deliberate. Only the interest portion of your mortgage is relevant for tax and profit purposes. Capital repayment is the return of borrowed money, not a cost, so enter interest only.

Why is my individual tax bill higher than 40% of my profit?

Because of Section 24. You are taxed on profit before mortgage interest and only get a 20% credit back, so highly geared higher-rate landlords face an effective rate well above their headline band. The calculator shows this clearly in the individual view.

Does the company figure account for paying myself?

No. The limited company result is profit retained after corporation tax. Extracting it as dividends or salary triggers further personal tax, which you should factor in separately when comparing the two routes.

For the bigger picture - whether buy to let still stacks up in 2026, incorporation, financing strategy and the long-term numbers - read our full guide: Is buy-to-let worth it?

This tool is general information, not personal financial advice.