Quick answer
The £1,000 property allowance lets you ignore small amounts of rental income or deduct £1,000 instead of actual costs. It is better if your genuine expenses are below £1,000, and actual expenses are better if they are higher.
Updated October 2026 · Figures based on 2025/26 rates
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How the allowance works
If your gross rental income is £1,000 or less, it can be fully exempt and you do not need to report it. If it is higher, you choose between deducting £1,000 or your actual expenses.
Comparing the two
Add up your real costs first. If they exceed £1,000, claim expenses. If you have few costs, claim the allowance.
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Limits
You cannot use the allowance if you rent to your own company or a partnership you belong to, and you cannot combine it with the rent-a-room scheme on the same income.
Rent-a-room alternative
If you rent a furnished room in your own home, rent-a-room relief of £7,500 may exclude the income altogether.
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Frequently asked questions
Can I claim the allowance on multiple properties?
The allowance is a single £1,000 per person across all property income, not per property.
Do I need to tell HMRC if I use the allowance?
If income is above £1,000, you tell HMRC and choose the allowance on your return.
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