If you own rental property and file a Self Assessment return, Making Tax Digital for Income Tax already applies to you or shortly will. The £50,000 tier has been in force since 6 April 2026, the £30,000 tier follows on 6 April 2027, and £20,000 on 6 April 2028.
The question landlords ask first is almost always the wrong one: is the threshold per property? It is not. Here is how the test works, how portfolios and joint ownership are handled, and what happened to furnished holiday lets.
The threshold is on you, not your properties
Qualifying income is your total income from self-employment and property before expenses — turnover, not profit. It is measured at the level of the person, aggregating every property you let and any sole trader business you run.
| Qualifying income | Measured on your return for | Mandated from |
|---|---|---|
| Over £50,000 | 2024/25 | 6 April 2026 |
| Over £30,000 | 2025/26 | 6 April 2027 |
| Over £20,000 | 2026/27 | 6 April 2028 |
Three flats at £18,000 of rent each is £54,000 of qualifying income, not three sub-threshold properties. And because the test is gross, mortgage interest, letting agent fees, insurance and repairs do not reduce it. A landlord who barely breaks even after finance costs can still be mandated. Add a sole trader business and the two stream together: HMRC’s worked example is £25,000 of rental income plus £27,000 of self-employment income, giving qualifying income of £52,000.
Each threshold is tested against a tax year that has already closed — HMRC checks the Self Assessment return you submitted in the previous tax year. The £30,000 tier starting 6 April 2027 is decided by your 2025/26 return.
Multiple properties: one business, one update
This is the part that reduces the workload considerably, and it is under-reported.
All your UK properties are legally treated as one ‘UK property business’. You do not create separate digital records for each property, and you do not send separate quarterly updates. Your software adds everything together into a single UK property update. A ten-property portfolio produces the same four submissions a year as a single flat.
Foreign property is a separate business with a different rule. You must create separate digital records for each individual foreign property you receive income from. But all your foreign properties are legally treated as one ‘foreign property business’, so your software still combines them into one quarterly update.
The quarterly update deadlines are 7 August, 7 November, 7 February and 7 May, plus a tax return by 31 January.
Jointly let property: your share, with concessions
Your share counts towards qualifying income. Own a property jointly with a sibling generating £50,000 of income split equally, with no self-employment, and your qualifying income is £25,000. Where you are only ever told your share after expenses have been deducted, HMRC assesses that net figure instead.
For record keeping, HMRC has built in real easements for joint lets:
- You only record your share of income and expenses.
- You can create less detailed records. Rather than a record per rent receipt, you can create a single digital record per category of income for each update period, and a single digital record per category of expense for the whole tax year. A landlord receiving £1,000 a month can create one record showing £3,000 for the quarter.
- You can leave joint-let expenses out of your quarterly updates entirely. If you do, you add them after the tax year ends — either by resending your fourth quarterly update or by adjusting the category total in your software.
- You do not need to digitally link your records to the other landlord’s. Your records are yours.
Properties you own outright get none of these concessions. Their income and expenses go into your quarterly updates as normal.
Furnished holiday lets: the regime is gone
Anything you read about a separate MTD treatment for furnished holiday lets is out of date. The furnished holiday lettings tax regime was abolished with effect from 6 April 2025 for Income Tax and Capital Gains Tax (1 April 2025 for Corporation Tax).
Nothing replaced it. Former FHL properties simply form part of your UK or overseas property business and are treated in line with all other property income and gains. For MTD purposes that means:
- FHL income counts towards qualifying income like any other rent
- it goes into your ordinary UK (or foreign) property digital records
- there is no separate FHL calculation and no separate reporting
The tax consequences still bite. Finance cost restriction rules now apply, so loan interest relief is restricted to the basic rate of Income Tax as for other landlords. Capital allowances are gone for new expenditure, replaced by replacement of domestic items relief — although an existing pool can continue to attract writing-down allowances. Chargeable gains reliefs for trading business assets have been withdrawn, and the income no longer counts as relevant UK earnings for pension relief.
What you have to record digitally
You must create and store digital records of your property income — rent, lease premiums, reverse premiums and inducements — and your property expenses, including rent, repairs, maintenance and other services. Each record needs the amount, the date and a category, using the same categories as Self Assessment.
You must also keep your original records. Digital record keeping does not replace bank statements, invoices and the supporting documents you already retain. Keep everything for at least 5 years after the 31 January submission deadline for that tax year.
Simpler categorisation below £90,000
If your total UK property turnover is under £90,000 — the VAT registration threshold — you can categorise your digital records in less detail. The concession applies to jointly let property too.
But residential landlords get a smaller easement than sole traders. A sole trader below the threshold only needs to record whether a transaction is income or an expense. If you receive UK property income from residential property, you must record whether a transaction is income or an expense and, if it is an expense, whether it is a restricted finance cost.
If your turnover later reaches £90,000, you must categorise all records for that income source in full — from the start of the current tax year and in the following one — before you can send a quarterly update or submit your return. If unsure, categorise in full from the outset. The threshold does not apply to foreign property income.
Rent-a-Room and the property allowance
Rent-a-Room relief lets you earn up to £7,500 a year tax-free from letting furnished accommodation in your home, halved if you share the income. Create digital records of the income and the relief is applied automatically; decide to claim it only after the tax year ends and you resend your fourth quarterly update.
The property allowance is £1,000 of gross property income. If you claimed it on your last return, you still keep digital records and include the income in your quarterly updates — the allowance is claimed at the year end.
Frequently asked questions
Is the £50,000 MTD threshold per property or across my whole portfolio?
Across everything. Qualifying income is your total income from self-employment and property before expenses, aggregated across every property you let and any sole trader business you run. Three flats at £18,000 of rent each is £54,000 of qualifying income.
Do I need separate quarterly updates for each rental property?
No. All your UK properties are legally treated as one UK property business, so they produce one set of digital records and one quarterly update. Foreign properties need separate digital records per property but still combine into a single foreign property update.
How does MTD work if I own a property jointly?
Only your share of the income and expenses counts. You can create less detailed digital records for joint lets, and you can leave joint-let expenses out of your quarterly updates and add them after the tax year ends. You do not need to link your records to the other owner’s.
What happened to furnished holiday lets under MTD?
The furnished holiday lettings tax regime was abolished with effect from 6 April 2025 for Income Tax and Capital Gains Tax. Former FHL properties form part of your ordinary UK or overseas property business, so there is no separate FHL reporting under Making Tax Digital.
How long do I have to keep my digital records?
At least 5 years after the 31 January submission deadline for that tax year — the same period as Self Assessment. You must also keep your original records and supporting documents.
Getting a portfolio onto a digital footing
For most landlords the mechanics are lighter than the headlines suggest: one property business, one quarterly update, real concessions on joint lets. The work is in the setup — software that supports your income sources, historic records migrated, and knowing which costs are restricted finance costs rather than ordinary deductions.
SmartFiling handles MTD for Income Tax and Self Assessment on a fixed fee, covering digital records, quarterly updates and your year-end return for UK and foreign property. Every submission is reviewed by an ICAEW Chartered Accountant, turnaround is three weeks, and it is handled entirely online.
