If you are a landlord in the UK with property income above £50,000, Making Tax Digital for Income Tax is now your reality. From April 2026, you must keep digital records and submit quarterly updates to HMRC using compatible software. The threshold drops to £30,000 from April 2027.
But here is the challenge: most MTD software is designed with general small businesses or freelancers in mind. Landlords have specific needs — rental income tracking, property expenses, mortgage interest calculations, and sometimes multiple properties to manage. Not every tool handles these well.
This guide helps you choose the right MTD software for your property business.
What Landlords Need From MTD Software
Before looking at specific products, let's be clear about what a landlord actually needs:
1. Property Income Tracking
You need to record rental income from each property (or a portfolio) on a regular basis. If you have multiple properties, you want to be able to track income by property or at least see a clear breakdown.
2. Property Expense Categories
Landlord expenses are different from typical business expenses — see our full guide to landlord allowable expenses under MTD. You need categories for: - Mortgage interest (remembering the finance cost restriction that limits tax relief to basic rate) - Repairs and maintenance - Letting agent fees - Insurance (landlord/buildings/contents) - Ground rent and service charges - Council tax (if paid by you rather than the tenant) - Utilities (if included in the rent) - Legal and professional fees - Travel to properties for inspections or maintenance
3. Quarterly Submissions
The software must be able to generate and submit quarterly updates to HMRC via their MTD API. This is non-negotiable — it is the core legal requirement.
4. Handling Multiple Properties
Many landlords own more than one property. You need software that can handle this without making the record keeping unnecessarily complicated.
5. Final Declaration
After the four quarterly updates, you need to submit a Final Declaration. This finalises your property income for the year and confirms your overall tax position, including any other income sources.
Software Options for Landlords
ClearMTD availability
ClearMTD is in development and has not received HMRC production approval. Public registration and live submissions are unavailable. Its current scope is owner-operated digital records and in-year quarterly updates for self-employment, UK property and foreign property. Final Declaration and agent filing are not supported.
Xero
Xero is a full accounting platform that supports MTD for Income Tax. It can handle property income alongside other business income.
Why landlords like it: - Comprehensive reporting and bank reconciliation - Can manage complex financial situations (e.g., multiple income sources) - Large integration ecosystem
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
QuickBooks
QuickBooks offers MTD for Income Tax support and can be configured for property income tracking.
Why landlords like it: - Established brand with strong support - Good mobile app - Bank feed integration
Considerations: - Pricing has increased over the years - Setting up for property income may require some configuration - More features than most landlords need
FreeAgent
FreeAgent supports MTD for Income Tax and has a UK-focused approach to tax. Free for NatWest/RBS business account holders. If you are paying for FreeAgent out of pocket and only need MTD compliance, see our FreeAgent alternative guide for simpler options.
Why landlords like it: - UK tax timeline feature shows estimated liability - Free with NatWest/RBS business banking - Designed for UK tax rules
Considerations: - Property income tracking is not its strongest area — primarily designed for freelancers - Monthly cost if you are not a NatWest/RBS customer
Free commercial software
HMRC does not provide its own MTD for Income Tax software. Free products are available from commercial providers; check their eligibility, limits and supported income sources in the official software finder.
Choosing the Right Option: A Decision Framework
If You Have 1-3 Properties With Straightforward Finances
ClearMTD is awaiting HMRC production approval and is not available for live filing. Its current scope excludes Final Declaration and agent filing.
Join the free ClearMTD waitlist for launch updates. No launch date is confirmed.
If You Have a Large Portfolio (10+ Properties)
Consider a more comprehensive tool like Xero or QuickBooks, especially if you already use property management software that integrates with them. The reporting and bank feed features become more valuable at scale.
If You Have Property AND Self-Employment Income
ClearMTD is awaiting HMRC production approval and is not available for live filing. Its current scope excludes Final Declaration and agent filing.
Join the free ClearMTD waitlist for launch updates. No launch date is confirmed.
If You Use a Letting Agent
Many landlords receive monthly statements from their letting agent showing rent received minus agent fees. Your software needs to handle this properly — recording the gross rent as income and the agent fee as an expense, not just the net amount. Most MTD software supports this, but check before committing.
Key Considerations for Landlords
Mortgage Interest and the Finance Cost Restriction
Since April 2020, landlords can no longer deduct mortgage interest as an expense in full. Instead, you receive a basic rate (20%) tax credit for your finance costs. Your MTD software needs to handle this correctly — recording mortgage interest separately so it can be treated properly in your tax calculations.
Capital vs Revenue Expenses
Replacing a broken boiler is a revenue expense (deductible). Installing a brand new central heating system in a property that never had one is a capital expense (not deductible as a running cost, though capital allowances may apply). Your software should allow you to categorise these correctly.
Furnished vs Unfurnished Properties
If you let furnished properties, you may be able to claim the Replacement of Domestic Items Relief for replacing furniture, appliances, and furnishings. Your software should support tracking these costs separately.
The £1,000 Property Allowance
If your gross property income is under £1,000, you can use the property allowance and do not need to report it. If your income is above this (which it almost certainly is if you are a landlord within MTD), the allowance does not apply.
Getting Started as a Landlord
The process for landlords is the same as for sole traders under MTD:
- Register for MTD for Income Tax with HMRC via your Government Gateway account
- Choose compatible software — one that handles property income properly
- Set up your properties in the software and begin recording income and expenses
- Submit quarterly updates within one month of each quarter ending
- File your Final Declaration by 31 January
For more detail on the quarterly process, see our guide on HMRC quarterly reporting.
If you are not sure whether MTD applies to you based on your income, our quick guide on whether you need MTD software can help.
ClearMTD is awaiting HMRC production approval and is not available for live filing. Its current scope excludes Final Declaration and agent filing.
Join the free ClearMTD waitlist for launch updates. No launch date is confirmed.
Frequently Asked Questions
Does MTD apply to me if I only have one rental property?
It depends on your total qualifying income. If the rent from your property (combined with any self-employment income) exceeds £50,000 gross, you must comply from April 2026. The number of properties does not matter — it is the total income that counts.
Can I use different software for my property income and self-employment income?
In theory, yes — you can use different software for different income sources. However, it is simpler to use one tool that handles both, as your Final Declaration needs to bring everything together.
Do I need to submit separate quarterly updates for each property?
No. Your quarterly update covers all your property income combined. You do not submit separate returns for each property — you report your total property income and total property expenses for the quarter.
What if I have joint ownership of a property?
If you jointly own a rental property (for example, with a spouse), you each report your share of the income and expenses. If you own 50/50, you each report half. Each owner needs their own MTD software and submits their own quarterly updates.
Do I need to report capital gains through MTD?
No. MTD for Income Tax covers your rental income (revenue), not capital gains from selling properties. Capital gains from property sales are reported separately. However, you should keep records of capital expenditure on your properties for when you eventually sell.
Related Guides
Compare the provider’s current subscription price, VAT, introductory discounts and renewal cost against the features you need. A lower price is useful only if the product supports your income sources and required filing tasks.
