What is the £1,000 property allowance?
By the VoxaMTD team. Last verified 31 October 2026
It is a tax exemption of up to £1,000 a year on gross property income. It applies per person, not per property, and you can use it instead of deducting actual expenses. It cannot create a loss.
If your gross property income is £1,000 or less, you do not need to tell HMRC or declare it, but you must keep records. If it is over £1,000 and you use the allowance, you can deduct up to £1,000 but not more than your income.
Each joint owner gets their own £1,000 allowance against their share of the gross rental income. You also get a separate £1,000 for trading income.
You cannot use it if you claim the tax reducer for finance costs on a residential property, such as mortgage interest, or for Rent a Room income. You also cannot use it for income from a company you or a connected person controls, or from your employer.
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