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Tax Relief for property owners: changes

What income taxes do property owners pay? 

Private property owners must pay the following taxes: 

  • Stamp Duty tax: when they purchase a property  
  • Income Gains tax: when they rent properties  
  • Capital Gains tax: when they sell properties 
  • Corporation tax: when property owners manage their properties via a limited company 


Are property owners entitled to tax-free income and relief?  

Property owners are entitled to £1,000 tax-free property allowance. Those earning more than £1,000 are required to inform HMRC by filing a tax return. The amount of income tax you are required to pay is determined by how much you earn. For the current tax year (2022-2023), the amount of tax-free income permitted is £12,570. You can read more about this on the website.  


It is also possible to transfer allowances within a marriage or civil partnership.  


Recent Changes in property owner-related tax 


Changes to income tax for 2022-23: 

As a result of the pandemic, there was an income tax basic and higher rate threshold freeze to allow the UK economy to recover. There are currently no changes to income tax.  


Tax changes for dividend payments: 

Those owning a limited company and pay with dividends should be aware that the dividend tax rate increased by 1.25% in April 2022. You are not required to pay tax on dividends below £2000. 

What are the changes in landlord tax relief in 2020? 

Since 2020, property owners have no longer been able to deduct mortgage interest repayments and allowable expenses from their rental income. Property owners are now taxed on their total annual income and can only claim tax relief at a 20% basic rate on whichever of the following is lower:  

– Finance costs  

– Profit from rental income (minus allowable expenses) 

– Total income 

The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances. 

T +44 (0)203 488 1488 




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June 2023