UK Buy-to-Let Yield Calculator — Methodology

Last verified 5 May 2026 against HMRC Section 24 landlord guidance. Calculator at /uk/property/buy-to-let-yield-calculator/.

What this calculator does

Calculates gross yield, net yield, and post-tax cash flow on a UK buy-to-let property, applying the Section 24 mortgage interest restriction (relief at the basic 20% rate as a tax credit) for higher-rate landlord taxpayers.

The formula

Gross yield = (annualRent / propertyValue) × 100

Operating costs:
  costs = mgmtFees + maintenance + insurance
        + groundRent + serviceCharge + voids

Net yield = ((annualRent - costs) / propertyValue) × 100

Section 24 (post-2020 regime):
  taxableIncome = annualRent - costs (NOT minus mortgage interest)
  incomeTax     = taxableIncome × marginalRate
  basicRateCredit = mortgageInterest × 0.20
  taxBill       = max(0, incomeTax - basicRateCredit)

Cash flow = annualRent - costs - mortgageInterest
          - mortgageCapital - taxBill

Authoritative sources

Assumptions and limitations

Section 24 applies in full — finance-cost relief is given as a 20% basic-rate tax credit, not as a deductible expense.
Assumes the landlord owns personally; corporate structures (SPV / Ltd) are out of scope and treat finance costs differently.
Voids are entered as a percentage of annual rent and applied as a flat operating cost.
Capital repayments on the mortgage reduce cash flow but are not tax-deductible.
Does not model wear-and-tear, capital allowances on furnished holiday lets, or replacement-of-domestic-items relief.

Source data

The rates used by this calculator are exported as machine-readable CSVs:

Income tax rUK 2026/27 /data/income-tax-rUK-2026-27.csv

These CSVs regenerate automatically from our canonical rate data at every build, ensuring the calculator output and the published rate data stay in sync.

Verification log

5 May 2026: Section 24 basic-rate credit and BTL methodology verified against PIM2054

Try the tool: UK Buy-to-Let Yield Calculator →