What is the £1,000 property allowance?

For people with small amounts of income from renting out land or property.

Applies to: England, Scotland, Wales, Northern Ireland Last checked against official sources: 6 October 2026

The property allowance lets you earn up to £1,000 a year from land or property without paying tax on it.

If your gross property income is £1,000 or less, you usually do not need to tell HMRC.
If it is over £1,000, you can deduct £1,000 instead of your actual expenses.
Joint owners each get £1,000 against their own share.
You cannot use it if you claim relief for mortgage interest on a home you let out.
Between £1,000 and £2,500, contact HMRC. Above that, you may need Self Assessment.

Key facts

£1,000 a year tax free
Use instead of actual expenses
Each joint owner gets £1,000
Not with mortgage interest relief

Property allowance for 2026/27

The property allowance is a tax-free amount of up to £1,000 a year for people with income from land or property. It could be rent from a flat, a parking space, a garden or a field. It applies to each tax year, including 2026/27 (6 April 2026 to 5 April 2027).

Your gross property income in the year	What happens
£1,000 or less	Usually tax free, and you do not need to tell HMRC
Over £1,000	You can deduct £1,000 instead of your actual expenses
£1,000 to £2,500	Contact HMRC
Over £2,500 after expenses, or £10,000 before expenses	Register for Self Assessment

Gross income means the full amount you receive, before any costs.

Worked example: allowance is better

You let a parking space for £3,000 a year. Your costs are £400.

Using the allowance: £3,000 minus £1,000 = £2,000 taxable
Using expenses: £3,000 minus £400 = £2,600 taxable

The allowance gives you the lower taxable profit, so it is the better choice.

Worked example: expenses are better

You earn £3,000 in rent and your allowable costs are £1,800.

Using the allowance: £2,000 taxable
Using expenses: £1,200 taxable

Here, claiming your actual expenses is better. You cannot use both.

Jointly owned property

If you own a property with others, you each get your own £1,000 allowance against your share of the gross rent.

Who cannot use it

You cannot use the property allowance if:

you get property income from a company you, or someone connected to you, owns or controls
you get property income from a partnership where you, or someone connected to you, is a partner
you get property income from your employer, or your spouse's or civil partner's employer
you claim the tax reduction for finance costs, such as mortgage interest, on a home you let out
you let a room in your own home and deduct expenses instead of using the Rent a Room Scheme

Records to keep

Even if your income is under £1,000, keep records showing what you earned. This could be invoices, a spreadsheet, bank statements or booking records.

If you live in Scotland, Wales or Northern Ireland

The property allowance is an HMRC rule and works the same way across the UK.

Related guides

Where these figures come from

Get it done

This takes you to the official service, which is free to use.

Check the property allowance rules

Common questions

Do I need to declare rental income under £1,000?

Usually not, as long as none of the exclusions apply to you, such as letting to your employer or claiming mortgage interest relief.

Can I use the property allowance and claim expenses?

No. If your income is over £1,000, you choose either the £1,000 allowance or your actual allowable expenses.

Can I use it with Rent a Room?

You cannot use it if you are deducting expenses for a room in your own home instead of using the Rent a Room Scheme.

Official sources

1.Tax-free allowances on property and trading income (GOV.UK)www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
2.Renting out a property: paying tax (GOV.UK)www.gov.uk/renting-out-a-property/paying-tax

Checked against GOV.UK on 6 October 2026

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