MTD for Landlords 2026: What Property Owners Need to Know

Making Tax Digital for Income Tax (MTD for ITSA) is now live, and landlords are firmly in scope. If your gross property income exceeds £50,000, you are required to keep digital records and submit quarterly updates to HMRC from April 2026 onwards. The threshold drops to £30,000 from April 2027.

For many landlords, this is a significant change. The traditional approach — handing a shoebox of receipts to an accountant once a year — no longer meets HMRC's requirements. This guide covers everything property owners need to know about MTD in 2026, from rental income reporting to handling multiple properties.

Who Is Affected?

MTD for Income Tax applies to individuals with qualifying income above the threshold. For landlords, qualifying income means your gross rental income — the total rent received before deducting any expenses.

This is an important distinction. If you receive £55,000 in rent but spend £20,000 on mortgage interest, repairs, and management fees, your profit is £35,000 — but your gross income is still £55,000, which puts you above the £50,000 threshold.

Multiple Income Sources

If you have both self-employment income and property income, HMRC looks at the combined total. A freelance graphic designer earning £30,000 from self-employment and £25,000 from a rental property has qualifying income of £55,000 and is caught by the April 2026 rules.

Multiple Properties

Owning multiple properties does not create multiple MTD obligations. Your property income is reported as a single property business. Whether you own one buy-to-let flat or a portfolio of fifteen houses, you submit one set of quarterly updates covering all your properties.

However, keeping track of income and expenses across multiple properties requires proper organisation. You need to know which expenses relate to which property, even though the quarterly update itself reports totals.

What Landlords Must Do

1. Keep Digital Records

All income and expenses related to your property business must be recorded digitally using HMRC-compatible software. Paper records or manual spreadsheets that are not linked to compatible software do not meet the requirement.

Your digital records must include: - Rental income received from each property - Allowable expenses such as repairs, insurance, letting agent fees, and mortgage interest - The date of each transaction - The amount and category of each item

For a full breakdown of what qualifies as digital record keeping, see our guide on MTD digital records.

2. Submit Quarterly Updates

Four times a year, you must submit a summary of your property income and expenses to HMRC. The quarterly periods follow the tax year:

Quarter Period Deadline
Q1 6 April – 5 July 7 August
Q2 6 July – 5 October 7 November
Q3 6 October – 5 January 7 February
Q4 6 January – 5 April 7 May

Each update must be submitted within one month of the quarter ending. For a detailed walkthrough, see our quarterly reporting guide.

3. End of Period Statement and Final Declaration

After your four quarterly updates, you file an End of Period Statement (EOPS) to finalise your property income figures for the year. Then you submit a Final Declaration, which replaces the traditional Self Assessment tax return. The deadline for both is 31 January following the end of the tax year.

Property Expenses Under MTD

Recording expenses correctly is critical for landlords. Here are the main categories of allowable property expenses:

Mortgage Interest

Since April 2020, mortgage interest relief for residential landlords has been restricted to a basic rate tax credit (20%). You still need to record mortgage interest payments, but the tax relief is calculated differently from a straightforward expense deduction. Your MTD software should handle this correctly.

Repairs and Maintenance

Day-to-day repairs are allowable expenses. This includes fixing a boiler, repainting walls between tenants, replacing a broken window, or repairing a leaking roof. However, improvements — such as adding an extension or converting a loft — are capital expenditure and are not deductible as revenue expenses.

The distinction between repairs and improvements catches out many landlords. Replacing a kitchen with a broadly equivalent kitchen is a repair. Replacing a basic kitchen with a luxury kitchen could be partly treated as an improvement.

Letting Agent Fees

If you use a letting agent, their management fees are fully deductible. This includes tenant-finding fees, rent collection charges, and ongoing management percentages.

Insurance

Buildings insurance, contents insurance (if you provide furnishings), and landlord liability insurance are all allowable expenses.

Other Deductible Costs

  • Council tax (if you pay it rather than the tenant)
  • Utility bills (if included in the rent)
  • Ground rent and service charges for leasehold properties
  • Legal and professional fees related to the property business
  • Travel costs for property inspections and maintenance visits
  • Advertising for tenants

Handling Multiple Properties in Practice

If you own several properties, the key to smooth MTD compliance is consistent record keeping throughout the year. Waiting until the quarterly deadline to gather all your figures across multiple properties is a recipe for stress and errors.

Practical tips for portfolio landlords:

  • Record transactions as they happen — or at least weekly. Most letting agents provide monthly statements, so use those as a prompt to update your records.
  • Use categories or tags to separate income and expenses by property. Even though your quarterly update reports totals, you need property-level detail for your own records and your End of Period Statement.
  • Keep a separate record of capital expenditure — improvements that are not deductible as revenue expenses but may reduce your Capital Gains Tax liability when you sell.

Choosing MTD Software as a Landlord

Not all MTD software handles property income well. Some tools are designed primarily for sole traders selling services, and property income is an afterthought. When evaluating software, check that it:

  • Supports property income as an income source (not just self-employment)
  • Includes relevant expense categories for landlords
  • Handles quarterly submissions to HMRC via the MTD API
  • Is straightforward enough that you do not need accounting knowledge to use it

ClearMTD is built specifically for MTD for Income Tax compliance, with full support for landlords and property income. It handles quarterly updates, End of Period Statements, and Final Declarations — without the complexity of a full accounting platform.

Start your free trial of ClearMTD and get your property business MTD-compliant in minutes, not hours.

What If Your Income Is Below the Threshold?

If your gross property income is below £50,000, you are not yet required to comply with MTD for Income Tax. However, the threshold drops to £30,000 from April 2027, and HMRC has indicated it may be lowered further in future years.

Voluntary registration is available now. Some landlords choose to sign up early to get familiar with the process before it becomes mandatory. There is no penalty for starting early, and it means you are well prepared when the requirement does apply to you. For more details, see our article on MTD exemptions.

Frequently Asked Questions

Do I need MTD software if I only have one rental property?

Yes, if your gross rental income exceeds the threshold (£50,000 from April 2026, £30,000 from April 2027). The number of properties does not matter — it is your total property income that determines whether you must comply.

Can my accountant handle MTD for me?

Your accountant can submit quarterly updates on your behalf using agent services. However, you (or your accountant) still need to keep digital records throughout the year. The days of handing over a pile of paperwork once a year are over.

What happens if I miss a quarterly deadline?

HMRC operates a points-based penalty system for late submissions. Each late quarterly update adds a penalty point. Once you reach a threshold of points, you receive a £200 fine for each subsequent late submission. For more detail, see our article on MTD penalties.

Does furnished holiday lettings income count?

The furnished holiday lettings (FHL) regime was abolished from April 2025. FHL income is now treated the same as other property income for tax purposes. It counts towards your qualifying income threshold and is reported as part of your property business under MTD.

What about overseas property income?

Overseas property income is a separate property business for tax purposes. If you have both UK and overseas rental income, you may need to report them separately within your MTD submissions. Check with your software provider or accountant for how this is handled.