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AIBU?

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Original poster

Aibu most people don't know rental income is taxable?

158 replies

sicknessmedi · 23/10/2025 22:42

Most people don't realize that if you have a second home and rent it out, you have to declare rental income as income and pay tax?

OP posts:
Notmymarmosets · 23/10/2025 23:24

Rent a room scheme allows for the first £7500 from a lodger to be tax free. But yes presumably everyone who needs to know understands that tax is generally liable.

Slightyamusedandsilly · 23/10/2025 23:17

sicknessmedi · 23/10/2025 22:47

Do you gatekeep the posts? You don't need to post

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Everyone knows this. Other than you seemingly.

MrsSkylerWhite · 23/10/2025 23:15

Surely that’s glaringly obvious?

snoffle · 23/10/2025 23:14

Until the law changed in 2015, landlords could often not pay income tax on rental income, as you only had to pay tax on the profits. So, if the rent was similar to the mortgage, that mortgage payment would be an expense, therefore no income tax due. Maybe some people aren't aware of the change.

TheSmallAssassin · 23/10/2025 23:12

How would you not know that rental income is taxable? I'm not a landlord, but it seems obvious to me.

HateMyselfToo · 23/10/2025 23:11

I would think most people know you have to pay tax on income.
HMRC do loads of adverts about tax returns and it would be impossible to fill out a tax return and NOT know as it is a specific question.

WhatdidIforget · 23/10/2025 23:10

I have come across (in a voluntary role I do) lots of landlords who didn't understand that - just as with any business - they had to budget for expenses eg. Routine maintenance, repairs, void periods. What kind of idiot doesn't set money aside for repairs and maintenance. It's staggering. So sadly I can well believe that some also don't realise they have to pay income tax on an income

Lionfisher · 23/10/2025 23:09

sicknessmedi · 23/10/2025 22:47

Do you gatekeep the posts? You don't need to post

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It’s not entirely uncalled for I was trying to work it out to.…

.. are you posting to see if people really didn’t realise (spoiler alert I can’t think of anyone sensible who wouldn’t)

.. were you pleased when you found out yourself (I think it’s a good thing)

.. what do you think it explains, eg hatred towards landlords because people think they don’t pay tax?

.. and has knowing this changed what you think about anything, if so what and why?

tigger1001 · 23/10/2025 23:08

Yeah, I suspect most who have rental income are very well aware it's taxable but some choose not to declare it as "how will Hmrc find out?". Until of course Hmrc do in fact find out.

ignorance isn't a defence

LBFseBrom · 23/10/2025 23:07

Most people do know that.

Hellohelga · 23/10/2025 23:06

Everyone with a rental property knows this.

hattie43 · 23/10/2025 23:03

I’m a landlord and know this as does my accountant sadly

HoskinsChoice · 23/10/2025 23:03

sicknessmedi · 23/10/2025 22:44

I have spoken to many people and they don't know

Why have you spoken to many people about this? I'm nearly 60 and this subject has never cropped even once in my conversation in all that time.

TheWonderhorse · 23/10/2025 23:02

Is that meant to be some sort of surprise? Of course it's taxable, it's income. Just like the insurances/expenses are tax deductible.

So the tax paid is on the income minus the expenses.

TheNightingalesStarling · 23/10/2025 23:02

Of course, if his property is his only income, he may be within the Personal Allowance and owe no tax.

But youvstull have to do the Self Assessment tax form to show you owe no tax. And can be fined for failing to tell them you owe no tax.

RunMeOver · 23/10/2025 23:02

What, you mean we have to pay tax in this country? Why didn't anybody tell me?

MannersAreAll · 23/10/2025 22:59

I've spoken to a guy with investment property and he didn't know.

Of course he knows.

Quite a lot of people think claiming they didn't know is a defence that will be accepted so bullshit they don't know.

Alpacajigsaw · 23/10/2025 22:59

RaininSummer · 23/10/2025 22:56

They are very thick if they actually don't know that we generally pay tax on our income. Probably more likely that they were hoping to get away with it.

This :/

Surely most people know they have to pay income tax on, erm, income?

Beamur · 23/10/2025 22:59

HMRC don't accept stupidity as a reason for not paying your tax.

Garamousalata · 23/10/2025 22:58

There’s capital gains tax to be as well.

RaininSummer · 23/10/2025 22:56

They are very thick if they actually don't know that we generally pay tax on our income. Probably more likely that they were hoping to get away with it.

sammyspoon · 23/10/2025 22:52

sicknessmedi · 23/10/2025 22:44

I have spoken to many people and they don't know

‘Many people’ certainly might not know. But if someone actually owns a second property and rents it out they will almost certainly be aware.

Original poster
sicknessmedi · 23/10/2025 22:51

Changingplace · 23/10/2025 22:50

People who are landlords or just general people? If someone isn’t renting out a property what difference does it make if they know or not?

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I've spoken to a guy with investment property and he didn't know.

OP posts:
Titasaducksarse · 23/10/2025 22:51

Those that don't know this are, most likely pretty crap landlords I would imagine.

TokenGinger · 23/10/2025 22:51

Do you mean that the average Joe doesn’t know often doesn’t know this? If so, I agree. I see so many comments on Facebook posts (where houses are advertised for rent) about how greedy landlords are etc., and many don’t understand the costs involved.

To be honest, before my DP moved in with me and we put his up for rental, I didn’t know you had to. By the time he pays 20% tax, the estate agent fee of 13%, his landlord’s insurance and boiler insurance, his mortgage is only just covered. Which is great that it is covered, it basically takes care of itself, but he’s certainly not rolling around in it like many think (though I fully appreciate he has an asset there which is increasing in value, not at his cost).