Does property income count for MTD?
Short answer: yes. Property income is the main reason most landlords end up in MTD ITSA. The catch: HMRC uses gross rent, not your taxable profit after mortgage interest and expenses.
By Mehmet Demir · Last reviewed: 2 May 2026 · Source: HMRC · Methodology
Bottom line
UK rental income, furnished holiday let income, and foreign property income declared on UK Self Assessment all count toward MTD qualifying income.
The figure is gross, before deducting mortgage interest, repairs, agent fees, or insurance. A landlord with £62,000 of rent and £25,000 of expenses still has £62,000 of qualifying income.
Joint ownership
If two people own a property together, each is assessed on their share of the gross rent. A 50/50 split on £80,000 of rent gives each owner £40,000. Both land in the April 2027 group (£30k threshold), not the April 2026 group that would otherwise apply to the whole £80,000.
Worked examples
Sole landlord, BTL with mortgage. £62,000 rent, £25,000 mortgage interest. Qualifying income is £62,000, so the April 2026 group.
Couple with one flat. £36,000 rent, 50/50 ownership. Each owner has £18,000 qualifying income, so neither is in scope (under £20k).
Landlord plus side hustle. £24,000 rent plus £35,000 freelance turnover. Qualifying income is £59,000, so the April 2026 group.
FAQs
Does rental income count toward MTD qualifying income?v
Is it gross rent or net rent?v
I rent out a single room under Rent a Room. Does that count?v
My partner and I jointly own the property. How is it assessed?v
What about furnished holiday lets?v
Does foreign rental income count?v
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