Reviewed by Mustafa Bilgic
Founder, WebCalculator · Last updated 26 July 2026
Rent-a-Room and trading allowance per GOV.UK. Tax rates from HMRC 2026/27. Not financial or tax advice.
Earning from Airbnb? If you rent a room in your own home, the first £7,500 is tax-free under Rent-a-Room relief. For a whole property, the £1,000 trading allowance may apply. Enter your Airbnb income and employment salary below to see how much tax you owe in 2026/27 — and which relief saves you the most.
Income and relief type
The tax treatment depends on whether you rent a room in your own home or a whole separate property.
If you let a furnished room in your main home, the first £7,500 of gross income is tax-free. If you earn more, you choose: use the £7,500 allowance and pay tax on the excess, or deduct actual expenses. For most hosts earning under £7,500, no self assessment return is needed. Source: GOV.UK.
Income from a whole property is taxable rental income. You can deduct allowable expenses (cleaning, insurance, Airbnb fees, repairs, a proportion of utilities). Mortgage interest is restricted to a 20% tax credit under Section 24. The Furnished Holiday Lettings regime was abolished from April 2025. For a full rental income calculation, see the rental income tax calculator or the rent-a-room relief calculator.
It depends. If you rent a room in your main home, the first £7,500 is tax-free under Rent-a-Room relief. If you rent a whole separate property, you are taxed on the profit after allowable expenses.
The limit is £7,500 a year from letting furnished accommodation in your main home. If income exceeds £7,500, you can use the allowance and pay tax on the excess, or deduct actual expenses instead.
If your Airbnb is a whole property (not your main home), the £1,000 trading allowance may apply. If total property income is under £1,000, no tax is due and no return is needed. You cannot use both Rent-a-Room and the trading allowance.
If your total Airbnb income exceeds £7,500 (Rent-a-Room) or £1,000 (trading allowance), you must register for self assessment and declare the income.
If opting out of Rent-a-Room, you can deduct cleaning, laundry, insurance, Airbnb service fees, a proportion of mortgage interest (at 20% tax credit), council tax, utilities, and wear-and-tear replacement costs.
Yes. The FHL regime was abolished from April 2025. Short-term lets are now treated like standard rental income — mortgage interest relief is restricted to a 20% tax credit under Section 24.