Is the Rent a Room Scheme tax-free?
By the VoxaMTD team. Last verified 31 October 2026
Yes, up to a threshold of £7,500 a year from letting furnished accommodation in your own home. The threshold is halved to £3,750 if you share the income with someone else.
The exemption is automatic if you earn less than the threshold, so you need to do nothing. You can choose not to opt in to the scheme and instead record your income and expenses on the property pages of your tax return.
Opting out can suit you if your actual expenses are higher than the income. You cannot use the property allowance for Rent a Room income.
If you have both lodger income and other rental properties, the rest of your rental income is taxed in the usual way. Check whether the Rent a Room income affects your Making Tax Digital position, as it may need recording in your fourth quarterly update.
Read next
- What is Rent a Room scheme? →
- Rental Income Tax Tips for UK Landlords (2026) →
- Year-end Self Assessment →
Sources
- GOV.UK: The Rent a Room Scheme
- GOV.UK: Tax-free allowances on property and trading income
- GOV.UK: Send quarterly updates