Last reviewed: November 2026
The property allowance lets you earn up to £1,000 a year from property tax-free, such as renting out a driveway, a parking space, storage or an occasional let.
How it works
- Gross property income of £1,000 or less: it is tax-free and you don’t need to tell HMRC.
- Over £1,000: deduct the £1,000 allowance instead of your actual expenses, or claim your real expenses if they are higher. The allowance cannot create a loss.
When you can’t use it
- If you claim tax relief on mortgage interest for a residential let.
- For income from a company or partnership you or a connected person control.
- Alongside rent-a-room relief, if you deduct expenses for that income instead of using the scheme.
Reporting
Property income between £1,000 and £2,500: contact HMRC. Over £2,500: register for Self Assessment.
Letting a furnished room in your own home? The rent-a-room scheme gives a bigger £7,500 allowance.
We help landlords choose the allowance or expenses, whichever saves more. Ozvite sa nám.
Sources: GOV.UK – Tax-free allowances on property and trading income.