Making Tax Digital for landlords: the complete guide

If you let out property, Making Tax Digital (MTD) for Income Tax may change how you deal with HMRC. Instead of one tax return a year, you keep digital records and send a short update every three months. Many landlords will join from April 2027, often without realising that the test uses rent before costs. This guide explains how the rules apply to landlords, in plain English.

What is MTD for landlords?

MTD for Income Tax applies to landlords in the same way as sole traders. You:

• keep digital records of your rental income and expenses in compatible software
• send quarterly updates to HMRC by 7 August, 7 November, 7 February and 7 May
• submit a final declaration (your tax return) by 31 January after the tax year ends

Quarterly updates are cumulative from 6 April, so each one covers the tax year so far (GOV.UK). HMRC does not provide its own software, so you choose a compatible product. Some are free for simple affairs.

There's a soft landing for penalties. HMRC will not apply penalty points for late quarterly updates in the 2026 to 2027 tax year. After that, you get 1 point per late update and a £200 penalty at 4 points. Penalties for late tax returns and late payment still apply.

When does MTD start for landlords?

1. 6 April 2026: qualifying income over £50,000 in the 2024 to 2025 tax year.
2. 6 April 2027: qualifying income over £30,000 in the 2025 to 2026 tax year.
3. 6 April 2028: qualifying income over £20,000 in the 2026 to 2027 tax year.

These dates come from HMRC (GOV.UK). HMRC checks your Self Assessment return each year and writes to people in scope. Use our Do I need MTD? checker to see your date now.

Does MTD use my rent or my profit?

Your rent. Qualifying income is your total gross income from UK property and self-employment (GOV.UK). Gross means before you take off costs such as:

• letting agent and management fees
• repairs and maintenance
• insurance, ground rent and service charges
• mortgage interest

This catches many landlords out. A portfolio can make a small profit while the rent is well over £30,000.

How does MTD work for jointly owned property?

If you own a property with someone else, only your share of the rent counts towards your qualifying income (GOV.UK). Each owner looks at their own total.

For example, a married couple jointly own a house let for £40,000 a year, split 50:50. Each has £20,000 of rent for the test. Neither is over £30,000, so neither joins in April 2027 on this property alone. But if one of them also has £12,000 of self-employment income, their total is £32,000, and they are in.

I have a job and a rental. Do I need MTD?

Only your rent (and any self-employment income) counts. Wages from a PAYE job, pensions and dividends are left out. So a teacher earning £42,000 who lets one flat for £11,000 has qualifying income of £11,000. That's under every current threshold.

The reverse also matters. A retired landlord with a good pension and £35,000 of rent is over £30,000, even though the pension doesn't count.

Does Airbnb and holiday let income count?

Yes. The special tax regime for furnished holiday lettings was abolished from April 2025 (GOV.UK). Income from Airbnb and other short-term holiday lets is now treated as ordinary property income. It counts towards your qualifying income in the usual way, gross, before cleaning, platform fees and other costs.

If you let a room or a holiday home through a platform and also have other property, add the gross income together.

What about foreign property?

HMRC's qualifying income guidance explains how foreign property income is treated, so check it carefully if you let abroad (GOV.UK). If you are in MTD and have foreign property, make sure your software supports it. Clear Books' Property plans and 123 Sheets both say they cover foreign property. If you're unsure, speak to an accountant.

Do I still keep records of mortgage interest?

Yes. Finance costs such as mortgage interest are treated differently from other expenses for tax, but you still need to keep records of them. Record them in your MTD software alongside your other costs. Your accountant or the software will handle how they feed into your tax bill.

What records should landlords keep for MTD?

MTD means keeping your records digitally, in software, rather than on paper. In practice, for each property you'll want to record:

• Rent received, with dates, including any rent collected by an agent on your behalf
• Costs, such as repairs, agent fees, insurance, ground rent, service charges and certificates
• Finance costs, such as mortgage interest, recorded separately
• Receipts and invoices, photographed or uploaded as you go

If you use a letting agent, their monthly statement shows rent in and fees out. Many landlords simply enter or upload each statement once a month. With bank feeds, most transactions arrive on their own and you only need to tag them to the right property.

How much does landlord MTD software cost?

Based on prices checked in October 2026 (ex VAT), there are options for every budget:

• Free: Clear Books Property Free, or Landlord Studio MTD Go for 1 to 3 units (with a £5 charge per submission).
• Under £10 a month: Clear Books Property (£5), Landlord Vision Starter (£7.99 on annual billing) and Hammock Basic (£8 for 1 to 3 properties).
• £10 to £15 a month: FreeAgent Landlord (£10) and Hammock Standard (£15 for 4 to 10 properties).
• About £20 a year: 123 Sheets bridging software, if you prefer to keep a spreadsheet.

Intro offers change, so check the live price before you sign up.

Can landlords get an exemption from MTD?

Some people are exempt automatically, including anyone with qualifying income of £20,000 or less, trustees and personal representatives (GOV.UK). You can also apply as digitally excluded if it's not reasonable for you to use software because of age, health, disability, religious belief or no internet access. Cost, having few records or never having used software are not accepted reasons.

What is the best MTD software for landlords?

General accounting software works for landlords, but landlord-specific tools make life easier. They sort income and costs by property, and some add tenancy and compliance features. Here are the main options, with prices checked in October 2026:

Prices exclude VAT unless stated and were checked on each provider's website in October 2026. Introductory offers change often, so always confirm the live price. App ratings are from the UK App Store and Google Play in October 2026.

• Hammock pulls in your bank transactions and sorts them by property. From £8 a month for 1 to 3 properties. It pays us nothing. Read our Hammock review.
• Landlord Vision combines accounts, tenancies and compliance reminders. Best for portfolios. Read our Landlord Vision review.
• Clear Books has a free Property plan, or £5 a month with bank feeds.
• FreeAgent has a £10 Landlord plan, and is free with an eligible NatWest, RBS, Ulster Bank or Mettle account.
• Landlord Studio MTD Go is free for 1 to 3 units, with a £5 charge per MTD submission.

Prices exclude VAT and intro offers change. For the full ranking, see best MTD software for landlords, or compare the two specialists in Hammock vs Landlord Vision.

How do MTD and the Renters' Rights Act overlap?

If you let in England, 2026 brings two big admin changes at once. The Renters' Rights Act 2025 ended section 21 "no fault" evictions from 1 May 2026, and a Private Rented Sector Database is rolling out from late 2026 with mandatory registration and an annual fee (GOV.UK).

The good news is that the same habits help with both:

• One place for records. Keep rent, costs, certificates and tenancy dates together.
• Reminders. Some landlord software, such as Landlord Vision, sends compliance reminders for things like gas safety and EPCs, as well as tax deadlines.
• Property by property. Tracking each property separately makes database registration and tax updates simpler.

Our Renters' Rights Act landlord checklist covers the legal side step by step.

Your landlord MTD checklist

1. Add up your gross rent (your share for joint property) plus any self-employment turnover.
2. Check your start date with our checker.
3. If you have a letting agent or accountant, ask what software they use.
4. Choose software that handles quarterly updates, the final declaration and all your property types.
5. Set up each property and connect your bank account if your software offers bank feeds (your transactions flow in automatically).
6. Sign up for MTD on GOV.UK (sign-up guidance).
7. Diary the deadlines: 7 August, 7 November, 7 February, 7 May and 31 January.

Also self-employed? Our MTD for sole traders guide covers quarterly updates, penalties and the final declaration in more depth.