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Buy-to-Let Yield Calculator

Updated August 2026 Last reviewed 10 August 2026 Mortgage & Property HMRC: tax on property income

Buy-to-let returns depend on the purchase costs, mortgage interest and income tax as well as the rent. This calculator gives you a realistic net yield for a basic-rate taxpayer.

Enter the price, rent, running costs and annual mortgage interest.

Your details

Letting fees, insurance, maintenance, voids

Results

Net yield after tax
2.64%
Basic-rate taxpayer, interest relief applied
Net yield before tax
2.80%
Gross rental yield
6.00%
Profit before tax
£5,600.00
Profit after tax
£5,280.00
Estimate — exact tax depends on your total income
Stamp duty on purchase
£11,500.00
Includes the 5% additional property surcharge

How the calculation works

We believe numbers should be transparent. Here is the formula behind this calculator.

Net profit = rent − costs − mortgage interest · Tax = 20% of profit − 20% of interest · Net yield = after-tax profit ÷ price

Worked example

Worked example: £200,000 property, £1,000/month rent

Annual rent £12,000, minus £2,400 costs and £4,000 interest → profit £5,600.
Basic-rate tax: 20% of £5,600 = £1,120, less 20% interest relief £800 → tax £320.
After-tax profit ≈ £5,280 → about 2.6% net yield on £200,000.

Important assumptions

  • Assumes a basic-rate (20%) taxpayer with mortgage interest relief at 20%.
  • Stamp duty includes the 5% additional property surcharge on each band.
  • Ignores purchase fees, capital gains tax and the wear-and-tear allowance.

Rates & official sources

Every calculation is based on the official rates and rules published by GOV.UK and HMRC.

HMRC: tax on property income gov.uk

Frequently asked questions

How is buy-to-let tax calculated?

Rental profit is added to your income and taxed at your marginal rate. Since 2020, mortgage interest gives a 20% tax credit instead of being deducted as an expense. This calculator uses the basic-rate example.

What stamp duty do I pay on a buy-to-let?

A 5% surcharge is added to every stamp duty band for additional properties. If you already own a home, expect roughly 5–6% of the price in stamp duty, depending on the price and when you buy.

What is a good buy-to-let yield?

A net yield after tax of 4% or more is generally considered decent in the current market. Many properties in high-rent areas achieve 5–7% gross, which drops after costs, interest and tax.

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Stamp Duty Calculator

Work out the Stamp Duty Land Tax you owe when buying a home in England or Northern Ireland.

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Related guides

New to the topic? Read a plain-English guide on mortgage & property, with worked examples and tips.

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Understanding mortgages

Terms, rates, fees and the questions every buyer should ask.

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These calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.