New tax year checklist for property investors
Are you a property investor? Then now, at the start of the new tax year, is the right time to review your property finances, tidy your records and make sure you are ready for any rule changes that affect you.
For April 2026, the biggest issue for many landlords is Making Tax Digital for Income Tax. But that is only one part of the picture. You also need to keep an eye on rental profit, mortgage interest relief, capital gains, ownership split and, for some investors, company tax planning too.
Check whether Making Tax Digital now applies to you
From 6 April 2026, Making Tax Digital for Income Tax starts for landlords and sole traders whose qualifying income is over £50,000.
That means you may need to keep digital records, use compatible software and send regular updates to HMRC. The key point is that the threshold is based on qualifying income, not profit.
So, at the start of the tax year, work out whether your rental income plus any self-employed income pushes you over the limit. Then choose software, organise your records and make sure you are ready well before deadlines begin.
Get your records in order
Clean records will make tax easier, quicker and safer.
You should be able to track rent received, mortgage interest, agent fees, insurance, repairs, service charges, safety checks and any other property costs. It also helps to keep property spending separate from personal spending wherever possible.
This matters even more now because digital record keeping is becoming far more important.
Review your allowable expenses
Not every cost reduces your rental profit.
Running costs such as letting fees, insurance, repairs and accountancy fees will usually count as allowable expenses. Improvements usually will not. That means you need to be clear about the difference between repairing something and making it better than it was before.
This is one of the most common areas where landlords make mistakes.
Do not overclaim mortgage interest relief
For residential property held personally, mortgage interest doesn’t work like a normal deductible expense. Instead, tax relief is restricted to the basic rate.
That can be a nasty surprise for higher-rate taxpayers because your taxable profit may look higher than the cash left in your bank account. This is a good time to review how much finance cost relief you are claiming and whether your cash flow still looks healthy.
Use replacement relief properly
Where you replace domestic items in a residential let, you may be able to claim relief.
This usually covers things like sofas, carpets, white goods and beds. But it applies to replacements, not first-time purchases. So make sure you separate initial furnishing costs from genuine replacement costs.
Review joint ownership
Joint ownership can have a big impact on tax.
Spouses and civil partners are usually taxed 50/50 on jointly owned property income unless a different beneficial ownership split is in place and the right reporting steps have been taken.
So ask whether your current ownership structure still makes sense. In some cases, a review will help you use tax bands and allowances more efficiently.
Know where your rental profit sits for income tax
Frozen tax thresholds mean more landlords may drift into higher-rate tax even without major growth in profit.
That makes it worth checking your likely income for 2026/27 early in the year. Once you know roughly where your total income will sit, you will be in a much better position to plan.
Limited company owner – review profit extraction
Where you hold property through a company, you also need to think about how you take money out.
From 6 April 2026, dividend tax rates are rising for many taxpayers. So this is a good moment to review whether salary, dividends or leaving profits in the company is the right approach for you.
Think ahead about buying and selling
Buying another property means looking closely at Stamp Duty Land Tax from the start.
Selling a property means thinking about Capital Gains Tax before the sale goes through, not after. You also need to remember that where CGT is due on a UK residential property sale, you will usually need to report and pay it within 60 days of completion.
A simple question for each property helps here – are you planning to hold it, refinance it or sell it?
Former holiday let owners – update your thinking
The furnished holiday lettings tax regime has gone. So any old assumptions based on the former FHL rules need checking.
That matters where you still own a property that used to qualify, because the tax treatment is no longer the same.
Do not leave tax planning until January
Even where Making Tax Digital applies, the habit that will help you most is still early planning.
Review your records now, check your ownership structure, understand your likely tax position and keep on top of deadlines. That will help you avoid stress, spot problems early and reduce the risk of paying too much tax because something was missed.
Your April 2026 checklist
Check whether Making Tax Digital now applies to you
Move to digital records and suitable software where needed
Keep property and personal spending separate
Review expenses and split repairs from improvements
Check mortgage interest relief has been handled properly
Claim replacement relief where it fits
Review joint ownership and tax efficiency
Estimate your 2026/27 income tax position
Company owner – review how you take profit out
Buyer – factor SDLT into your numbers
Seller – plan for CGT and the 60-day reporting rule
Former holiday let owner – update your tax planning early
Keep ahead of the new tax year – talk to Liondaris
A new tax year always runs more smoothly when you deal with the key issues early. When you review your records, check your tax position and plan ahead for changes, you put yourself in a far stronger place for the months ahead. You’ll cut stress, avoid nasty surprises and make better decisions about your property investments.
Speak to Liondaris & Co for clear, practical help with your property tax planning for 2026/27.